Capitalism

1. Axioms

The following axioms function as non-derived premises within capitalism. They express foundational assumptions about property, exchange, incentives, and coordination.

1. Private property is legitimate: Individuals and organizations can own productive assets and goods, with enforceable rights.
2. Voluntary exchange is valid: Trade between consenting parties is a legitimate mechanism for distributing goods and services.
3. Markets coordinate information: Prices and competition transmit dispersed information about scarcity, preference, and opportunity cost.
4. Incentives shape outcomes: Human behavior responds to rewards and constraints; institutions should align incentives with desired results.
5. Capital formation increases capacity: Investment and accumulation of capital are central to productivity growth and long-term development.

2. Derived Doctrinal Commitments

From these axioms, capitalism derives commitments about governance, firms, labor, and policy design.

• Enterprise autonomy: Firms and entrepreneurs should be free to innovate, compete, and allocate capital.
• Contractual relations: Employment and exchange are structured primarily through contract rather than status.
• Profit as signal: Profit and loss function as feedback for efficiency, value creation, and resource allocation.
• Limited but real state role: The state is typically justified as enforcing property rights, contracts, and rule of law, with debate over scope.
• Competition as discipline: Competitive pressure is treated as a mechanism that improves quality and lowers costs over time.

3. Ethical Framework

Ethical reasoning in capitalism often emphasizes freedom, responsibility, and welfare through growth, while contending with questions of inequality and externalities.

• Economic freedom: Individuals should be free to choose work, exchange, and investment within a rule-governed order.
• Merit and responsibility: Rewards are frequently justified as tied to contribution, risk, or productivity (contested in practice).
• Prosperity as moral good: Growth and increased living standards are treated as ethically significant outcomes.

4. Practices

Practices function as institutional and cultural supports for market exchange and capital formation.

• Market competition and entrepreneurship
• Investment, finance, and capital allocation
• Wage labor and contractual employment
• Commercial innovation and product development
• Legal enforcement of property rights and contracts

5. Internal Diversity

Capitalism contains substantial internal variation downstream from shared axioms.

• Laissez-faire, social-market, and mixed-economy models
• Different views on regulation, labor protections, and redistribution
• Shareholder versus stakeholder conceptions of firms
• Different institutional forms across countries and historical periods