Supposed “Varieties” of Capitalism

by | Jun 21, 2020 | POLITICS

Does capitalism exist in “varieties,” as scholars began to insist two decades ago, or is it a unique social system fundamentally unlike all others? If there is a “pure” form of capitalism, what alterations or transformations render it impure? How impure must it become before we should cease calling it capitalism and call it something else instead?

Does capitalism exist in “varieties,” as scholars began to insist two decades ago,[1] or is it a unique social system fundamentally unlike all others? If there is a “pure” form of capitalism, what alterations or transformations render it impure? How impure must it become before we should cease calling it capitalism and call it something else instead?

This is not a matter of mere semantics. It is a matter of life and death. History shows that social systems exhibit varying degrees of liberty and tyranny, wealth and poverty, happiness and misery. Life is fueled by liberty, wealth, and happiness – death by tyranny, poverty, and misery. To live best we must know what social system is best.

Every living organism has an optimal habitat, a setting in which it best survives and thrives; an opposite or inhospitable habitat can prove harmful, even lethal, to a species (think: “fish out of water”). Humans are no exception to this general principle. Our specific nature decrees that we too have a preferred habitat. Aristotle distinguished man as both the rational and political animal; our best habitat allows the free exercise of our mind and inter-personal relations. Call it a habitat for humanity.

Capitalism has proved to be the most hospitable habitat for humans. But what is capitalism, exactly? Why do so many humans, oddly enough, oppose it? Should it not win wide acclaim? Humans have free will and, equipped with reason, they can elect to achieve great things and scale great heights, surpassing all other species. But having no pre-programmed guide to good life, they do not automatically choose what is best. Unlike other species, humans can choose to be self-destructive. Instead of being rational and cooperative with their own kind, they can enslave, rob, or destroy them.

Hospitable as capitalism has been, it is also relatively new– just three centuries old. Its main rival, socialism, was known in some form even in ancient times (see Egypt, and Plato). Capitalism was the product of a unique time, the 18th century Enlightenment. It was “the Age of Reason,” a period replete with rational ideas, including Isaac Newton’s reality-grounded physics, John Locke’s rational philosophy, Adam Smith’s liberal political economy, and Alexander Hamilton’s constitutional politics. Consequentially, capitalism originated in the one century in man’s history that most prized man’s unique faculty of reason, when men sought to apply it as far and as wide as possible.

The question of the “humaneness” (or not) of a human social system implies an underlying premise that should be made explicit: the premise of humanism.  As its name suggests, humanism emphasizes the value and agency (free will) of human beings, and the possibility of human progress and improvement. Recognizing man’s distinctive faculty – reason – humanism is also pro-science, pro-progress (“progressive”), and pro-technology (labor saving, life-enhancing, man-made inventions and instruments). Humanism also denies divinity or “supernatural” influences. To seek an ideal social system, an optimal habitat for humanity, implies that one is pro-human – humane – humanitarian. But unlike non-human organisms, which automatically seek to preserve and grow themselves, to survive and thrive, humans possess agency (free will), so some may choose to only partially endorse humanism, others to reject it entirely, eschewing what they call “specie bias.”

Some “isms,” though not technically “social systems” nevertheless fundamentally oppose humanism.  Skepticism, for example, denies that reason is competent or that certainty is possible; in extremis skepticism becomes nihilism (from Latin, “nil,” nothing), the denial of all values, whether existential or moral. Nihilism feeds despair but also the desire to denigrate or destroy any values that might arise. Likewise, the phenomenon of “deep” environmentalism fundamentally opposes humanism. It conceives of nature as any or all things other than human things and insists that it possesses “intrinsic” (or “existence”) value, which exists, implausibly, apart from the existence of actual, valuing man. “Deep” environmentalism requires man not to touch, “spoil,” or exploit nature, else he contaminates and dissipates the world’s only pool of real value. But since humans cannot survive or thrive by being passive, this “ism,” like nihilism, is at root anti-man, anti-humanist, inhumane, and anti-humanitarian.

One of the ridiculous tragedies of our time is the clash between capitalism’s irrefutable productive prowess and the utter disdain felt for it by so many intellectuals.[2]  Either these intellectuals don’t care much about prosperity and human well-being (they are not humanists) or they care about such things but despise capitalism despite its capacity for prosperity. Many of them recognize (better than some pro-capitalists) how capitalism depends on and rewards the morality of rational self-interest, the profit motive, and the pursuit of happiness. They do not like any of it.

Capitalism’s critics may believe they’re humanists, but many harbor something like a medieval-puritanical bias against egoism, secularism, and materialism. Their dualism requires a view of capitalism as practical (efficient, productive) but immoral (not selfless or just). They decry its economic inequalities, refusing to see them as the natural result of diverse talents acting under equal protection of the laws. Preferring an unnatural equality of result, they insist that laws be discriminatory. Forced to choose, by their own false dichotomy, they prefer what they consider to be “moral” (selflessness) over what is practical; they prefer unfree societies of equally shared poverty to free societies of unequal but greater prosperity. This explains why so many despotic, anti-capitalist regimes in the past century have won the praise of so many intellectuals; these regimes and their fans have the blood of millions on their hands.[3]

Despite broad disdain for capitalism and a desire by so many to deform or destroy it, the system is resilient, because of its productive prowess and the survival of at least some pro-reason intellectuals. Capitalism has reality and logic (not illogical people) on its side. But just as there’s no guarantee that humans with agency will choose their best political-economic habitat, there’s no guarantee capitalism will survive absent its crucial prerequisites. Capitalism is the best habitat for humanity, but its sustenance also requires a certain habitat, in which reason (enlightenment) and egoism reign.

By now the array of supposed “capitalisms” is so enormous that it’s nearly impossible to keep track of them all, let alone to clearly define or distinguish them. Many types are patently contradictory (once you know capitalism’s essence). Some are just lame attempts to apologize for capitalism, to soft-peddle it to religious conservatives. Most types aim to dilute, abridge, or terminate capitalism. The types now total roughly two dozen and include (alphabetically) accountable capitalism,[4] anarcho-capitalism,[5] authoritarian capitalism,[6] common-good capitalism,[7] compassionate capitalism,[8] conscious capitalism,[9] crony capitalism,[10] democratic capitalism,[11] gangster capitalism,[12] illiberal capitalism,[13] laissez-faire capitalism,[14] late capitalism,[15] neo-liberal capitalism,[16] ordinary capitalism,[17] paternalistic capitalism,[18] political capitalism,[19] racial capitalism,[20] regenerative capitalism,[21] responsible capitalism,[22] social capitalism,[23] stakeholder capitalism,[24] state capitalism,[25] surveillance capitalism,[26] totalitarian capitalism,[27] welfare capitalism,[28] and woke capitalism.[29]

Only five more “varieties” need be concocted to match the famous thirty-one flavors of ice cream offered by Baskin Robbins. But the analogy is not apt. Despite the many flavors, Baskin Robbins’ customers know that they’re still getting ice cream. The company chose thirty-one flavors in part to match the days of the month,[30] but at some point, it must have recognized that new flavors were unpalatable. Moreover, had the company thereafter fundamentally altered its ingredients, the product would no longer be ice cream. We cannot analogize actual flavors of ice cream to the supposed flavors of capitalism once we recognize that the latter are but forms of anti-capitalism.

Most supposed varieties of capitalism can be partitioned into those coming from attempts to apologize for it, alter it, or negate it. Those who seek to defend capitalism but accept the false premise that it’s reckless and irresponsible concoct capitalisms that are “accountable” and “responsible,” with company executives beholden not to actual owners (shareholders) but to a broad universe of non-owners (“stakeholders”), to the insatiable demands of “democratic” society. Those who see capitalism as too rational, egoistic, and individualistic concoct capitalisms that are “compassionate,” “conscious,” “social,” and “paternalistic,” dedicated to human “welfare” and the “common good.” Those who believe capitalism can exist without government and the rule of law, or believe that neither can or must touch the economy, even while being financed by it and protecting it, will push “anarcho-capitalism”[31] or “laissez-faire” capitalism. Those who prefer to smear capitalism as “unjust” or to kill it by infusing it with rival systems will concoct capitalisms that are “racial,” “illiberal,” “authoritarian,” “totalitarian,” or versions of “state capitalism” run by “cronies” or “gangsters.”

Historically, the most famous anti-capitalist systems have included medievalism, feudalism, mercantilism, socialism, fascism, and communism. None constitute “versions” of capitalism or amendments that bolster it. These are rivals of capitalism, not allies.  Unlike capitalism, they fail to provide an optimal habitat for humanity; they make human lives and livelihoods not better but difficult, painful, or impossible.

As with all legitimate concepts – those derived from and tied to reality (as opposed to mere “constructs” or concoctions) – capitalism must be circumscribed because it has an identity. It is something specific, not something else. At some point – pertaining to the kind of thing it is, not to its degree – it cannot be altered (or fundamentally transformed”) without becoming something else entirely (or its opposite). I have said that many of the supposed “varieties of capitalism” are contradictory once capitalism’s essence is recognized. Here’s how philosopher-novelist Ayn Rand defined it:

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control. (emphasis in the original)[32]

Notice Rand does not conceive capitalism in narrowly economic terms (as is common).[33]  It is a social system with a distinct economics (free market) but also a distinct politics (constitutional, rights-respecting), a distinct spirit, or psychology (rational), and a distinct culture (vibrant, commercial, artistic, life-affirming). Moreover, the elements are mutually reinforcing; they operate consistently in service to the whole. Unlike socialism, capitalism does not contain the “seeds of its own destruction.” Most anti-capitalists concede these elements but despise their content.

Capitalism is an abstract but definable concept, a social system with a specific identity.[34] What then explains the multiplication of modifiers, the near-comical proliferation of types in recent decades? In part it reflects scholarly specialization, a perceived need to carve out a niche and “differentiate the product.” More deeply, it reflects an inability to identify the key essentials of an abstract concept or system – at root an incapacity to think in principles. Terminological excess may also reflect capitalism’s remarkable durability and adaptability. At least since 1848, the year of the Manifesto of the Communist Party by Karl Marx and Fredrick Engels, anti-capitalists have been predicting and praying for capitalism’s demise. Seeing capitalism persist, in whatever altered forms, anti-capitalists become annoyed and angry that it survives in any form to any degree. For a century they have tried to control, manipulate, mangle, and mutilate capitalism, but have failed to kill it off entirely; meanwhile they’ve extolled brutal, anti-capitalist regimes, refusing to take responsibility for the horrid results. To stay in the “debate,” they concoct more varieties of a product they hate.

One terrible problem resulting from the “varieties” approach is that the causes of system failures become more difficult or impossible to pinpoint or remedy. This may be yet another motive driving the varieties approach. “State capitalism,” for instance, isn’t a form of capitalism but a disparate mix of statism and capitalism (“disparate” meaning “essentially different in kind; not allowing comparison”). The nearby chart – “Ethical-Legal-Political Elements of Capitalism versus Socialism” – conveys the elements of each; the two systems are antonymous. “Statism” characterizes social systems that subordinate and sacrifice the liberty and rights of the individual to the coercive power of the state, in whatever form a state takes. Types of statism include nationalism, fascism, socialism, and communism, but also unlimited democracies that deploy majority power to override the rights of minorities and individuals.

Of course, most political-economic systems today are hybrids, various mixes of capitalist and statist elements. Thus, the varieties approach seems plausible; but the approach is also causal, for it implies that systems must be mixed, that none can be pure, or even move in the direction of purity (whether capitalist or statist). When systemic failure occurs, is it due to the capitalist or statist elements? The former ones constitute an optimal habitat for humanity; the latter ones do not. Nonetheless, whatever part of the mix is widely extolled will grow over time while the despised part will shrink, especially during crises, when change quickens. Tragically, in most mixed systems these days the vices and failures of statism are blamed on capitalism, causing a further shift toward statism, which implies still more vice and failure in the future.

The “varieties of capitalism” approach appears to reflect careful, nuanced scholarship. The more modifiers, the merrier (and better), it is thought. But modifiers should clarify, instruct, and guide us, not obscure matters, deceive, and misguide us. Capitalism is the supreme habitat for humanity; yet many of humanity’s conceptual leaders, its intellectuals, despise it and work to bury it in an avalanche of verbiage. This is one of the many ways that capitalism remains an “unknown ideal” to so many people. For the sake of humanity, capitalism deserves a better and clearer treatment.



[1] The seminal source is Peter A. Hall and David Soskice, editors, Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford University Press, 2001), but the book doesn’t survey all types; it distinguishes only “liberal market economies (LMEs) and “coordinated market economies” (CMEs), each of which entails a large degree of government regulation and redistribution (LMEs less so than CMEs). For a more recent treatment, see Colin Hay, “Are There Still Varieties of Capitalism?” Review of International Political Economy 27(2), 2020, pp. 302-319.

[2] Alan S. Kahan, Mind vs. Money: The War Between Intellectuals and Capitalism (Transaction Publishers, 2010). See also Friedrich Hayek, “The Intellectuals and Socialism,” University of Chicago Law Review, January 1948, pp. 417-433; Ludwig von Mises, The Anti-Capitalistic Mentality (D. Van Nostrand, 1956); Robert Nozick, “Why Do Intellectuals Oppose Capitalism?Cato Policy Report, January/February 1998; and “Thomas Cushman, “Intellectuals and Resentment Toward Capitalism,” Society 49(3), May 2012, pp. 247-255.

[3] Paul Hollander, From Benito Mussolini to Hugo Chavez: Intellectuals and a Century of Political Hero Worship (Cambridge University Press, 2016). The carnage has been documented in R.J. Rummel, Death by Government (Transaction Publishers, 1994).  Even after the fall of the Berlin Wall in November 1989, intellectuals assumed the inhumane system was capitalism, not socialism; see Steven Greenhouse, “In Search of Capitalism with a Human Face,” New York Times, May 20, 1990.

[4] U.S. Senator Elizabeth Warren (D-MA) introduced the “Accountable Capitalism Act” in 2018. See Warren, “Companies Shouldn’t Be Accountable Only to Shareholders,” Wall Street Journal, August 15, 2018 and Franklin Foer, “Elizabeth Warren’s Theory of Capitalism,” Atlantic, August 28, 2018.

[5] J. Michael Oliver, The New Libertarianism: Anarcho-Capitalism (Create Space, 2014).

[6] Kevin Rudd, “The Rise of Authoritarian Capitalism,” New York Times, September 16, 2018.

[7] U.S. Senator Marco Rubio (R-FLA), “The Case for Common Good Capitalism,” National Review, November 13, 2019.

[8] Rich DeVos, Compassionate Capitalism: People Helping People Help Themselves (Plume, 1994).

[9] John Mackey and Raj Sisodia, Conscious Capitalism: Liberating the Heroic Spirit of Business (Harvard Business Press, 2011).

[10] Luigi Zingales, “Crony Capitalism and the Crisis of the West,” Wall Street Journal, June 6, 2012 and Saving Capitalism from the Capitalists (Princeton University Press, 2003).

[11] David W. Raudenbush, Democratic Capitalism (John Day Co., 1946) and Michael Novak, The Spirit of Democratic Capitalism (Madison Books, 1982).

[12] Nancy Holmstrom and Richard Smith, “The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China,” Monthly Review 51(9), February 2000.

[13] Jacek Rostowski, “Anatomy of Illiberal Capitalism,” Project Syndicate, September 11, 2017.

[14] Jacob Viner, “The Intellectual History of Laissez-Faire,” Journal of Law and Economics, October 1960, pp. 45-69. See also Ayn Rand, Capitalism: The Unknown Ideal (New American Library, 1967):

“When I say ‘capitalism,’ I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism—with a separation of state and economics, in the same way and for the same reasons as the separation of state and church.”

[15] Ernest Manel, Late Capitalism (NLB, 1975); Timothy Bewes, Reification, or the Anxiety of Late Capitalism (Verso, 2002); Annie Lowrey, “Why the Phrase ‘Late Capitalism’ is Suddenly Everywhere,” Atlantic, May 1, 2017.

[16] Gérard Duménil and Dominique Lévy, Capital Resurgent: Roots of the Neoliberal Revolution (Harvard University Press, 2004); Ryan LaMothe, “Neoliberal Capitalism and the Corruption of Society,” Pastoral Psychology, 2016, pp. 5-21; David Jaffee, “The Current Crisis of U.S. Neoliberal Capitalism,” Review of Radical Political Economics 51(2), 2029, pp. 193-210.

[17] Sanford F. Schram, The Return of Ordinary Capitalism: Neoliberalism, Precarity, Occupy (Oxford University Press, 2015).

[18] Andreas G. Papandreou, Paternalistic Capitalism (University of Minnesota Press, 1972).

[19] Randall G. Holcombe, Political Capitalism: How Economic and Political Power Is Made and Maintained (Cambridge University Press, 2018).

[20] Nancy Leong, “Racial Capitalism,” Harvard Law Review 8(126), June 2013, pp. 2151-2226 and Gargi Bhattacharyya, Rethinking Racial Capitalism: Questions of Reproduction and Survival (Rowman & Littlefield, 2018).

[21] John Fullerton, Regenerative Capitalism (Capital Institute, 2015).

[22] Bill George, “Forget Socialism. The U.S. Needs Responsible Capitalism,” Fortune, May 6, 2019.

[23] Kees van Kersbergen, Social Capitalism: A Study of Christian Democracy and the Welfare State (Routledge, 1995).

[24] Andrew L. Friedman and Samantha Miles, Stakeholder Theory: Theory & Practice (Oxford University Press, 2006) and R. Edward Freeman, Kirsten Martin, and Bidhan Parmar, “Stakeholder Capitalism,” Journal of Business Ethics, 2007, pp. 3030-314.

[25] Vladimir Lenin, On State Capitalism During the Transition to Socialism (Progress Publishers, 1917); C.L.R. James, State Capitalism and World Revolution (C.H. Kerr, 1986); Joshua Kurlantzick, State Capitalism: How the Return of Statism is Transforming the World (Oxford University Press, 2016).

[26] Shoshana Zuboff, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power (Profile Books, 2019).

[27] George Liodakis, Totalitarian Capitalism and Beyond (Routledge, 2010).

[28] Gosta Esping-Andersen, The Three Worlds of Welfare Capitalism (Princeton University Press, 1990); Alexander Hicks, Social Democracy and Welfare Capitalism: A Century of Income Security Politics (Cornell University Press, 1999); Robert E. Goodin et al (editors), The Real Worlds of Welfare Capitalism (Cambridge University Press, 1999); Alexander Hicks and Lane Kenworthy, “Varieties of Welfare Capitalism,” Socio-Economic Review, 2003, pp. 27-61.

[29] Matthew Continetti, “Woke Capitalism is a Sign of Things to Come,” American Enterprise Institute, November 26, 2019; Rachel Alexander, “Woke Capitalism: Big Business Pushing Social Justice Issues,” Stream, June 12, 2019; Ross Douthat, “The Rise of Woke Capital,” New York Times, February 28, 2018.

[30] Wikipedia: “The company is known for its ‘31 flavors’ slogan, with the idea that a customer could have a different flavor every day of any month The slogan came from the Carson-Roberts advertising agency (which later merged into Ogilvy & Mather) in 1953.”

[31] Anarchism is best classified as an anti-system. Typically, proponents cannot identify historical examples of any reasonable duration or success. Even theoretically, if anarchy is conceived as constructive instead of nihilistic, as some “utopia,” it must be noted that the term means non-existent, from the Greek, οὐ (“not”) and τόπος (“place”).

[32] Ayn Rand, Capitalism: The Unknown Ideal (New American Library, 1967), p. 11.

[33] The Oxford English Dictionary (2019) defines capitalism as “an economic system in which private capital or wealth is used in the production of distribution of goods, and prices are determined mainly in a free market; the predominance of private owners of capital and production for profit.”

[34] See Geoffrey M. Hodgson, Conceptualizing Capitalism: Institutions, Evolution, Future (University of Chicago Press, 2015). He discusses the challenges and problems of defining capitalism but does not meet or solve them.


Intermarket Forecasting
Dr. Salsman is president of InterMarket Forecasting, Inc., an assistant professor of political economy at Duke University and a senior fellow at the American Institute for Economic Research. Previously he was an economist at Wainwright Economics, Inc. and a banker at the Bank of New York and Citibank. Dr. Salsman has authored three books: Breaking the Banks: Central Banking Problems and Free Banking Solutions (AIER, 1990), Gold and Liberty (AIER, 1995), and The Political Economy of Public Debt: Three Centuries of Theory and Evidence (Edward Elgar Publishing, 2017). In 2021 his fourth book – Where Have all the Capitalist Gone? – will be published by the American Institute for Economic Research. He is also author of a dozen chapters and scores of articles. His work has appeared in the Georgetown Journal of Law and Public Policy, Reason Papers, the Wall Street Journal, the New York Times, Forbes, the Economist, the Financial Post, the Intellectual Activist, and The Objective Standard. Dr. Salsman earned his B.A. in economics from Bowdoin College (1981), his M.A. in economics from New York University (1988), and his Ph.D. in political economy from Duke University (2012). His personal website is


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