Definition of Capitalism

definition of capitalismThe definition of capitalism often used in economic terms and the one we use at christian business opportunities (cbo)

“An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.”

Profits. We often hear the word profit used as if it were a curse word. It is important to understand that it is profit that provides the sole incentive to take risk. See below.


What is an entrepreneur? Entrepreneurs are financial risk takers. They are the ones who risk starting a business.

The economist Thomas Sowell explains,

“When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring the people to do the work. Without that, nothing happens.

Even when one person decides to operate a store or hamburger stand without employees, that person must first pay somebody to deliver the goods that are going to be sold.

Money goes out first to pay expenses and then comes back as profits later-if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.”

Much of religion gives you the sense that to profit means taking advantage of others in some way that is not Christ-like. Many have developed a mindset that to have enough to live on is all they should be concerned with.

“Give us this day our daily bread…”

You need to develop a moral definition of capitalism. We define it like this:

“Capitalism is an economic system based on the principle of freedom and profit.”

Let’s Talk About Freedom

God has given man the gift of life. He created the earth for man to reign on the earth… not in heaven. God also gave man the freedom and creative thinking to figure out the best way to do it.

Yes… man messed up, but Jesus Christ redeemed us.

Capitalism and Freedom

We do our best when we are empowered to be fruitful, not coerced by others. Let’s face it.
Nobody likes to be told what they have to do. We flourish when we have the freedom to voluntarily find ways to better ourselves and others.

Do we need some help, some inspiration, some guidance and even some blessing from above along the way? Absolutely.

When we ask for it of our own free will… that’s what makes our heavenly Father smile.

Capitalism is simply what happens when we are free to prosper with the wisdom of God and free from government (even well intentioned) trying to impose its collective human wisdom upon society and individuals.

Let’s Talk About Profit

Many people are convinced we have limited resources… that somehow we are going to run out of this or that and the world will come to an end.

Do you really think a loving God would put us in a position to over populate the planet when He is the One who said that children are a blessing? What kind of cruel joke would that be?

There is an abundance of everything man needs to sustain life. Yes, we are to be good stewards of what we have.

Capitalism is the best way to conserve our resources.

As Patrick Sean O’Sullivan points out,

“Where profits are denied, entrepreneurship and innovation are stifled and all our lives are the worse for it. Beneath the definition of capitalism is the realization that we are never so efficient and effective as when we pursue our own reward.”

Of course greed, lust, selfish ambition and other ungodly traits exploit this freedom and abundance. Yet time and time again they are exposed and never last for more than the short term.

Looking Out After Others

Only by serving your fellow man and looking after others interests will you establish long lasting works in a capitalist economy.

Gwartney, Stroup, and Lee explain,

“People who earn large incomes do so because they provide others with lots of things that they value.
If these individuals did not provide valuable goods or services, consumers would not pay them so generously.
There is a moral here: if you want to earn a large income, you had better figure out how to help others a great deal.”

In our time, the definition of capitalism as defined here offers the best incentive to live out your Christian faith and answers the question of how to become an entrepreneur.

You were redeemed to be one of God’s benevolent kings and priests… to rule on the earth.