Capitalism is not the root cause of inequality. Even if we diagnose capitalism as the problem, it’s also the only system that simultaneously creates the ideals and structures to save itself.

In a recent book (Cudd and Holmstrom 2011), I argued that capitalism has brought about great changes in the quality and length of human life in the twentieth century: the income takeoff (the vast increase of per capita income of developed nations), the health transition (raising the life expectancy by upwards of fifty years), and the fertility transition (from an average of 6 children per woman to around 2). In this paper I delve further into the question of whether capitalism is good for women. A major problem with capitalism is that it increases inequality, which is especially harmful to women and other vulnerable groups. Capitalism increases economic inequality in the first instance, but this in turn tends to create political and social inequalities. Inequality, I agree, needs to be controlled if capitalism is to be progressive and defensible. I defend such a controlled capitalism in two ways that are particularly relevant to feminism as a progressive social movement for human freedom. First, capitalism promotes innovation: it promotes technical innovation that tends to improve quality and length of life for everyone, but particularly for women. But more importantly for the feminist defense of capitalism, it promotes social innovation, in particular the destruction of harmful, patriarchal traditions. Thus, the second defense I will make of capitalism is that it opposes tradition fetishism and reduces the oppression of traditional societies that impose hierarchies of gender and caste. Capitalism is a system in which there are non-discriminatory, legal protections of decentralized, private ownership of resources, cooperative, social production for all citizens, and free and open, competitive markets for exchange of goods, labor, services, and material and financial capital. The first thing to note about this definition is that it implies the socially and governmentally sanctioned nature of the system. Laissez-faire capitalism is an unrealizable ideal that could never actually obtain in fact because for capitalism to even exist, let alone prosper, property rights need to be defined by a legislative body and protected by a police force. Markets require trust and security, such as can only be supplied by a relatively complex social system of rights, trust, and protection. (Anderson 2004) Social, cooperative interaction is at the heart of the system, in both the creation of the social, legal infrastructure that frames economic production and exchange, and in production and exchange themselves. The second thing to note about this definition is that it emphasizes the competitive character of the system. Capitalism is a form of cooperative competition, a set of socially accepted rules within which players seek their best advantage, as they see it. Its normative value as a social system will depend upon both the rules that delimit the game and the values by which its players define their best advantage. Finally, the third thing to note is that this definition does not specify how capitalism relates to the distribution of resources, since government or private charity can redistribute the outcome of production and exchange – but only to a point. Redistribution of goods that removes the ability or incentive for people to create firms and produce for exchange makes the system something other than and opposed to capitalism. My view is that capitalism can be progressive toward feminist ends. This is a controversial view. I defend it by addressing two critical questions about capitalism. First, does capitalism bring about less oppression of women (and other groups) over time? This question can be asked looking backward and looking forward. Since I think that the answer is very clear looking backward that oppression of gender groups, racial groups, castes, and other groups is less now than before the advent of capitalism in the industrial revolution, I will concentrate on two forward looking questions: (1) does capitalism better eliminate current oppression than any alternative economic system? (2) does the apparent increase of inequality under capitalism imply that it is a regressive social institution? To this second question I now turn. In our recent book, I argued that capitalism does not initially create oppressive conditions for race, gender, or caste groups, but that it can be seen as creating inequalities of wealth and income given the longstanding background conditions of oppression for those groups. What I meant by that is that capitalism exploits and then exaggerates existing inequalities. Absent those oppressive conditions, however, capitalism would still create inequality of wealth and income, and whatever moral or social inequality that follows from that. The inequality objection to capitalism is that the inequalities created by capitalism are inevitable and morally unacceptable.