Conceptualizing Capitalism – A Summary
This essay summarizes key parts of the book Conceptualizing Capitalism (Hodgson 2015a). It briefly explains why institutions must be central to a definition of capitalism, and what is the nature and role of such a definition. It dates the rise of capitalism in England to the development of financial institutions in the eighteenth century, particularly concerning the institutional conditions for the use of property as collateral and the buying and selling of debt. It considers why economists and others have often downplayed the role of particular financial institutions. This provides a lead to the question of inequalities of wealth and income, and how they are generated within capitalism. In addition, while capitalism is a market system it inevitably has missing markets, leaving open a crucial role for the state.