Well, I thought I knew what it meant: using money to make more money. However, there had to be a technical definition, did there not? The first surprise was that the first appearance was as late as 1854 according to the Shorter Oxford, although capitaliste was in use in France in the preceding century. Still, the definition was crisp enough: The condition of possessing capital, or using it for production; a system of society based on this; dominance of private capitalists.
Things became a little more complicated on checking with a mid-twentieth-century Britannica. The entry for CAPITALISM (by Joseph Schumpeter) begins:
A society is called capitalist if it trusts its economic progress to the guidance of the private businessman. This may be said to imply, first, private ownership of nonpersonal means of production, such as land, mines, industrial plant and equipment; and, second, production for private account, i.e. production by private initiative for private profit. But, third, the institution of bank credit is so essential to the functioning of the capitalist system that, though not strictly implied in the definition, it should be added to the other two criteria.
Schumpeter, writing in the aftermath of the second world war and the New Deal, which both involved some federal government direction of labour and capital, with rationing and nationalisation in addition on this side of the ocean, saw the then economic system as fettered or at best guided capitalism. He saw the possibility of reversal but did not predict it. That came in with a vengeance a generation after his death under Reagan and Thatcher.
So I am surprised that Ben Chu concludes that:
“Capitalism” doesn’t really exist. There are various modes of market-based economic, social and legal organisation in rich countries, some of which work well in some respects, and some of which don’t.
and that the term:
has outlived its usefulness. It now merely spreads confusion and breeds dogmatism.
It seems to me that the dogmatism has always been there. Also, governments have always distorted the system, even without moving to outright socialism, when it suited them, especially in times of war. I believe that OED definition is good for a few years yet.
It has not failedNor has "capitalism failed" as the Occupy movement would have us believe. What has failed is regulation of markets and of the behaviour of the participants in them. Cartels and private monopolies thrive. After a short period when banks were reined in, we are beginning to revert to the bad days of Clinton-Bush-Blair-Brown.
State socialism has failed, but capitalism and the market society will continue. What elected governments must do is ensure that markets are fair and that capitalism works for all the people, not just the capitalists.