17 August 2015

Capitalism, an extended definition

Some concepts are more difficult to define that others. This presents terminologists with a major challenge.

'Capitalism' is such a term.

In the Books section dated 16 August, FT columnist John Plender (author of Capitalism: Money, Morals and Markets) reviewed Conceptualizing Capitalism: Institutions, Evolution, Future by Geoffrey M. Hodgson under the heading Linguistic purge finds inequality Marx missed.

Some quotes for those interested in the linguistic and terminological considerations (my bold):
There is no generally accepted definition of capitalism. Nor is there any agreement on its starting point, which anyway depends on the choice of definition.

One of the eccentricities of the book is that it takes more than 250 pages before spelling out its full definition of capitalism. This is because Hodgson is on a mission to cleanse economics of imprecise language. He believes that our understanding of the subject has been impaired by the “deep corruption” in the social sciences of terms such as property, exchange and capital. So he spends several chapters clarifying these and other concepts.
On the word capital itself he has good points to make. For a start, the economist’s standard definition of capital is at odds with business usage, which makes for confusion.

And now, according to Hodgson, we have been deluged with such loose terms as social capital, human capital, religious capital and cultural capital to the point where the word is emptied of meaning.
The obvious criticism, which he acknowledges, is that of Alice in Wonderland: he is making words mean what he wants them to mean. I would argue that terms like human capital are anyway meaningful and useful. The focus of this linguistic purge is too narrow.

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After completing a BSc in physics and maths in Australia and extended travels in Africa I found a job in Paris that left me with considerab...