A while back I got caught up in a fracas about using the term "capitalism" to mean the free market, fully voluntary system of economic relations. It didn't surprise me since I am aware that complicated matters often need to be discussed, well, in complicated ways so when one just refers to some system as "capitalist" or "democratic" or "socialist" or "libertarian," one is likely to start a dispute as to just what the term is to mean in the language in which such issues are to be discussed.
For most of my life and career, much of it entangled in writing about political economy, I have taken "capitalism" to mean just that, the free market, fully voluntary system of economic relations. No such system has ever existed, of course, and yet the term is often used to refer to certain extant economies, such as those of England, America, Australia, Hong Kong (prior to its return to China), and so forth. Some even call today's version of "communist" China a capitalist country. And with a bit of generosity this is no big problem. Such uses of "capitalist" or "capitalism" amount to indicating some of the most basic and distinctive features of a country's economic order without at all implying that the country is adhering thoroughly to the principles of capitalism as a fully developed, consistently implemented economic order conceived by those who champion it without compromise.
I like to compare this to using the term "marriage," since most marriages do not at all conform to the version of that institution that one has in mind in one's most romantic imaginings. Yet, we use "marriage" or "married" without constantly having to qualify it with such terms as "more or less," "troubled," "half ass" or the like. We just say, "Harry and Susie are married," realizing that what that amounts to in their case may not be the pure thing of romance novels.
There is a problem, however, since unlike most uses of "marriage" or "married," "capitalism" or "capitalist" rarely occurs in nonpartisan contexts. Those using the terms are usually either critics or champions. And the critics will mostly zero in on what they regard as the liabilities of capitalism while the champions on the assets, not bothering to make very clear what is the central or core aspect of the system. Even when one spells it out, however, there will be those who will look for a chance to besmirch capitalism and those who will admit to no possible problems with it at all.
I am not going to clear all this up here but I would recommend, strongly, that when such terms are used, a bit of time and space be reserved to offering some details, some qualifiers, such as "I do not have in mind state or crony or similar version of capitalism but the unsullied sort we find in such advocates as Ludwig von Mises or Ayn Rand." Sure, this may not pacify the determined critic and such a person is likely to associate capitalism with all kinds of features that no one who is honest would claim is a part of it. Thus, in a recent letter to me, in response to a column I wrote, someone insisted that capitalism must involve massive theft by the rich! And this zero sum idea about capitalism is evident in many discussions even though it is all wrong.
Of course, one can do a similar thing with all systems one does not favor, such as socialism or communism, and focus only on, say, the Soviet or North Korean version, not admitting that some forms may be rather mild and peaceful, such as the kind that we find in many a kibbutz or commune. Not that these will have escaped all the liabilities of a system in which the means of production are publicly owned but they may have managed to deal with them less harshly than the Soviets did when they collectivized Russia's farms.
Most of us do not have the time to discuss even the most important issues in full so that we do take care to cover all crucial elements and avert most honest misunderstandings. But it may be worth giving it a try if it is likely to secure a civilized discussion instead of what turns out to amount to a mere slinging of political ad hominems.