----------------- HES POSTING ----------------- There has been some journalistic debate in Romania in the early 1990's about what is to be constructed in Eastern Europe after the fall of communism: 'capitalism', pure or with modifications, or a 'market economy'. My personal belief is that 'capitalism' described well the developed world economy in 19th century to just about 1950; _capital_ was the main scarce factor of growth and it justified profits. 'Market economy' describes better the current state of the world: capital can be obtained plentifully through a well-developed market; but the scarce factor to make it work are favorable _markets_, i.e. intense consumer desires and/or cheap, organized resources (technology, labor, nature). They generate intangible values of corporate and brand names, that allow permanent oligopoly positions and profits better explained as _marketing rents_. Profit becomes something temporary (compared to expectations), due to unusually good leadership, technological advance and public relations. The fine art of propaganda becomes crucially important. My Professor (Gh. Ruxanda) argues that 'market economy' is not enough to describe the ideal concept; the correct one is 'free market economy'; after all, socialist exchange was based on a market, but not one in which agents were free-deciding. My questions: - Was 'capitalism' defined before Marx ? - When were 'market economy' and 'free market economy' introduced, first in scientific, then in popular language ? - Is there a shift of connotation in the Western world between them ? Best Regards, Mircea-Valer Pauca ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]