Aristotle argued that a society’s moral and political principles must be based on philosophy. Capitalism is no exception. The dominant philosophy of the nineteenth century, which was itself an example of Aristotle’s time, is the most significant lifeline for the social system. Although the latter’s influence waned in the nineteenth century, the principles of Aristotle’s political economy are still present in industrialized countries.
The term Capitalism was first used in 1854 by William Makepeace Thackeray, author of the novel The Newcomes. In the same year, the socialist and abolitionist Carl Adolph Douai used it to refer to the capitalist system. Throughout the 19th century, capitalism became the norm for most of the world’s economies. However, the neoliberal era ended in the early 20th century, as the new tycoons of industrialization accumulated their wealth over years.
The word capitalism derives from the Latin word caput. Its use in economic context dates back to the seventeenth century. By the mid-nineteenth century, capitalism had gained popularity and was hailed as the most effective system for creating prosperity. Its main characteristic is the free operation of capital markets. The prices of stocks, bonds, derivatives, currencies, and commodities are determined by supply and demand. As a result, capitalists can profitably invest in stocks, bonds, currency, and other forms of financial markets.
Finance capitalism is one type of capitalist economy. The dominant firms are bureaucratic, hierarchical corporations. This system is also referred to as corporate capitalism. It is characterized by the dominance of the financial markets. It is believed that the term “finance capitalism” first came into prominence with the work of Rudolf Hilferding. He studied the links between German monopolies and banks, and then titled the book Imperialism, the Highest Stage of the Capitalist Sphere. Lenin concluded that banks were the central nerve centers of national economies and thus a dictatorship of finance capitalism.
Today, the term capitalism has a different meaning from its Marxist interpretation. In this definition, capitalists believe that the economy should be dominated by banks and corporations. This form of economic growth is referred to as ‘corporate capitalism’. The dominant type of capitalism is characterized by the concentration of capital in large firms. It is a highly centralized, bureaucratic system. The economics of a nation are ruled by the laws of the country, and this system has become the most powerful force on a society.
The concept of finance capitalism first emerged in Europe during the early nineteenth century. In the early nineteenth century, the concept of finance capitalism was first conceived by Karl Marx. This theory of capitalist economics focuses on finance capital as the exclusive ownership of the industrial means of production. The term is derived from the Latin word ‘capitalism’, which literally means “head of cattle”. Hence, the idea of the “head of a cow” is a head of a capitalist.