Capitalism

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"The term capitalism denotes and economic system in which the greater proportion of economic life, particularly ownership of and investment in production goods, is carried on under private (i.e., non-governmental) auspices through the process of economic competition and the avowed incentive of profit... Capitalism is often regarded as passing through three successive stages, beginning with commercial capitalism, under which large-scale operators come to dominate the process of exchange, running on with the Industrial Revolution, into the stage of industrial capitalism, dominated by the owners of large factories, mines, and other industrial enterprises, and then to the stage of finance, or financial capitalism, in which control passes more and more into the hands of bankers and financiers dominating industrial enterprises to which they advance money, or to great investors divorced from the day-to-day management of industrial enterprises, but controlling them and extracting profit from them by their financial power. These stages are not, of course, mutually exclusive: the earlier do not cease to exist when the lager are superimposed upon them. Reference is sometimes made to a fourth form, state capitalism, defined by Lenin as a system under which the State takes over and exploits means of production in the interest of the class which controls the state... Still a fifth form is frequently described in the literature concerned with those economies in which there is an increased element of state intervention either in terms of welfare programs or of responsibility for employment and lessening the impact of the business cycle. This form is denoted by such phrases as welfare capitalism or protected capitalism..." - From G. D. H. Cole, "Capitalism," in Julius Gould and William L. Kolb, editors, A Dictionary of the Social Sciences (New York: The Free Press of Glencoe, 1964), pp. 70-71.


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