Capitalism, in one sense, is a social system. But in another sense, it is a principle on which to base a social system. While, in the former sense, no (pure) capitalist system has actually existed, the principle has existed (if implicitly) for quite a while, and has been implemented, in greater and lesser degrees, in various societies.
Before the airplane existed, it was an idea. Then the idea was implemented. The same can be true of Capitalism.
Capitalism is a man-made thing. As such, the concept can exist before the referents.
"Rand used the word "capitalism" to mean pure laissez-faire, and since this system has never existed, on what referents was the concept of "capitalism" formed?"
The question implies that 'in order for a concept to be valid, the item being conceptualized, as well as all of its referents, must have previously existed.'
Since this is a positive assertion about some aspect of the nature of reality (just like saying 'the sky is blue' is an assertion), disguised in the form of a question, I therefore conclude that the burden of proof lies with the person making the (implied) assertion. According to logic, the burden of proof does not fall on someone to dis-prove an assertion, but rather to prove a positive assertion.
I call on the person who asked the question to prove (or at least state) their implied assertion, so that we can comment on it further.
answered Sep 28 '10 at 00:21
I think Ayn Rand's conception of capitalism was based on the United States of America, especially at its founding. Laissez-faire capitalism is just that system made fully consistent both politically and philosophically, based on the concept of individual rights.
answered Oct 01 '10 at 04:59
As it happens, the concept of 'capitalism' was first formed by Marx! (The term 'capitalist' was first used by someone else, several decades earlier). He intended it as an insult, attempting to shame those who advocated the System of Natural Liberty (as it had previously been known as) by asserting that they were using liberty as a mask for self-interest. In delicious irony, he actually pointed out capitalism's true moral grandeur, so we capitalists now happily own the insult. Take that, ya mug!
The concept is valid precisely because it has always been of moral character as well as being applicable to social and economic issues. What Miss Rand did was go right to that moral core, identified essentials and derivatives, stripped away the nonsense generated to try to hide from the rational selfishness it depends on, and then, along with observations of various degrees of consistency with that moral core in socioeconomic practice, fully developed all that follows from that moral core in terms of practical consequences for both the individual and society. The result is the identification of a social system that is the consequence of the moral code that is proper for reasoning beings living in a fully causal world. Thus the concept is validly drawn from observations of the nature of man, the natures of morality and rights, and the correlations of self-interested morality, liberty, and economic success with each other.
IIRC, the attempt to strip reference to morality out of the concept came well after Marx. Others better versed in the details than I can answer better, but I think it was because, similar to Kant's evil motives for his Critiques, they recognised that they could not successfully attack capitalism so long as association with a reason-based individual-happiness-oriented morality was also held in mind by thinkers. Miss Rand rightly told them were to go and brought morality back to being the vanguard issue, where it belongs.
answered Oct 04 '10 at 02:27