There are at least four (and probably more) different understandings of what the word “capitalism” means floating around in the web world and because people cling only to their own definitions they all end up talking past one another.
If people really want to engage in meaningful commentary rather than rudely ranting at one another in order to show off their lack of understanding they need to stop using this confusing construction and say what they really mean – before even these definitions become equally corrupted.
Adam Smith believed that individuals should be free to create and trade their creations in a commercial marketplace but also believed that a limited government should administer a framework of law, cops and armies. Libertarians called “minarchists” (minimal rule by government) accept this definition but libertarians called “voluntaryists” reject it since all “limited governments” eventually burst their limits and become coercive nation-states such as America today.
Karl Marx and companions used the word during Europe’s Industrial Revolution to describe the dirty deal of big business bosses and their political peeps embedded in each other’s butts for the benefit of both at the expense of everyone else. Libertarians call this definition of capitalism “corporatism” to distinguish it from other definitions, and reject it.
America’s political rightwing uses “capitalism,” “mixed economy” and “free market” interchangeably in a process of fooling themselves and others that “capitalism” means “freedom” while destroying rights at home and setting up puppet governments around the world. Libertarians call all of this “crony capitalism” and reject it in favor of “laissez-faire free markets.”
Some libertarians believe in “anarcho-capitalism” by combining the definition of capitalism as “laissez-faire free market” with “anarcho-” being the combining form of “anarchist” defined as “no government rule.” The problem here becomes “anarchy” since it carries the additional definitions of “rioting,” “chaos,” “bomb-throwing,” “assassination” and otherwise no rules of any kind including social, cultural, voluntary or mutually agreed upon rules. Libertarians accept or reject this depending on the definitions being used.
Every ideological discussion about libertarianism and capitalism and related ideas is fraught with definitional disruptions. Ogle Google and you’ll find articles like “Is Libertarian Capitalism an Oxymoron?;” “Isn’t libertarian socialism an oxymoron?”; “Libertarian Paternalism is Clearly an Oxymoron;” “Anarcho-Capitalism: Oxymoron?;” “‘Libertarian Catholic’ is an Oxymoron;” “Is Green Libertarian Capitalism an oxymoron?” and on and on and obnoxiously more on.
Libertarians need to define themselves virtually every time they put fingertips to keyboards if they really want to be understood. Some are now resorting to calling themselves “laissez-faire free market post-statists of the Modern American Libertarian Movement.”
Otherwise, don’t use “capitalism” at all and simply invoke the Zero Aggression Principle.