Economic and Political Systems — A Field Guide
Reference note — quick-reference definitions for the systems that come up repeatedly in Worn Path discussions
This is a working glossary, not a political science textbook. The goal is to understand what each system actually proposes so we can engage with sources and critiques without getting tripped up by terminology.
Economic Systems
These describe how a society organizes production, distribution, and ownership of goods and resources.
Feudalism
Land-based hierarchy. Lords own land; peasants work it in exchange for protection. Your economic position is inherited. Power flows from land ownership, enforced by military obligation. Dominated Europe roughly 9th–15th centuries. The system capitalism disrupted.
Mercantilism
State-directed trade for national wealth accumulation. The crown grants monopolies, controls exports and imports, hoards gold. The East India Company is peak mercantilism. Adam Smith wrote The Wealth of Nations (1776) specifically to argue against this system — he wanted free markets, not corporate monopolies backed by warships.
Capitalism
Private ownership of the means of production. Owners employ workers; profit goes to owners. Key features: private property, wage labor, capital accumulation, market-based pricing. Comes in flavors — laissez-faire (minimal state), welfare capitalism (state provides safety net), state capitalism (government owns enterprises but operates them for profit, e.g. China’s SOEs).
Socialism
Collective or social ownership of the means of production. The workers or the community own the factory, not an individual capitalist. Also comes in flavors — democratic socialism (achieve it through elections), revolutionary socialism (achieve it through revolution), market socialism (socially owned firms competing in markets).
Communism
A classless, stateless, moneyless society where the means of production are communally owned and goods are distributed by need. In theory, the end-state beyond socialism. In practice, every attempt (USSR, China, Cuba) produced an authoritarian state that never “withered away” as Marx predicted. Bakunin called this in 1872.
Mutualism
Proudhon’s framework: workers own their own means of production, exchange goods through mutual credit, property exists through use and occupancy rather than absentee title. No state, no landlords, but markets still operate. Credit unions, co-ops, and CLTs are mutualist instruments even when not named as such. See Anarchism as Political Theory.
Mixed Economy
What most developed nations actually run: private enterprise operates within a framework of state regulation, taxation, and public services. The US, Germany, Japan, and Scandinavia are all mixed economies — they differ in how much state intervention, not whether.
Political Systems
These describe how power is organized and decisions get made. Separate from economic systems — you can pair them differently.
Democracy
Governance by the people. Direct democracy: citizens vote on policy (Swiss referenda, town meetings). Representative democracy: citizens elect legislators who vote on policy. Liberal democracy: representative democracy plus constitutional protections for individual rights and minorities.
Authoritarianism
Power concentrated in a leader or small group; limited political freedoms; no meaningful electoral accountability. Can coexist with various economic systems — authoritarian capitalism (Singapore, arguably), authoritarian socialism (Cuba), authoritarian mercantilism (various historical monarchies).
Republicanism
Government as a public affair (res publica) rather than the property of a ruler. Power derives from the people, exercised through elected representatives and constrained by law. The US is a constitutional republic with democratic elections — “republic” and “democracy” aren’t opposites despite what gets claimed in political arguments.
Oligarchy
Rule by a small, wealthy elite. Not usually self-described — most oligarchies call themselves democracies or republics. The critique that the US functions as an oligarchy (Gilens and Page, 2014) argues that policy outcomes track elite preferences regardless of public opinion.
Anarchism
No rulers, not no rules. Voluntary association, horizontal organization, mutual aid. See Anarchism as Political Theory for the full treatment.
Socioeconomic Frameworks
These cut across the economic/political divide — they describe how a society balances competing values.
Neoliberalism
The dominant Western framework since roughly 1980 (Thatcher, Reagan). Core claims: markets allocate resources most efficiently; the state should privatize, deregulate, and reduce social spending; free trade and capital mobility produce growth that benefits everyone. Critiqued heavily for producing inequality, financialization, and hollowing out public institutions. Not the same as classical liberalism, though it borrows the name.
Social Democracy
Capitalism with a strong welfare state. Private ownership of production, but high taxes fund universal healthcare, education, housing, and social insurance. Scandinavia is the standard reference. Distinct from democratic socialism — social democrats accept capitalism and try to redistribute its outputs; democratic socialists want to change the ownership structure.
Welfare State
Not a system per se — a feature of a system. The state provides a floor: unemployment insurance, disability, pensions, healthcare, housing assistance. Compatible with capitalism (most welfare states are capitalist). The question is always how high the floor is and who pays for it.
Libertarianism
Maximize individual liberty, minimize state power. Right-libertarianism (the US variety) focuses on property rights and free markets. Left-libertarianism accepts the liberty premise but argues that natural resources and land belong to everyone — closer to mutualism. The right version tends to ignore how “liberty” works differently when you start with capital versus without it.
Communitarianism
The individual exists within, and is partly constituted by, their community. Critiques both liberal individualism and socialist collectivism for ignoring the mediating institutions — family, neighborhood, congregation, guild — where people actually live. See Burkean Communitarianism - A Critical Frame for the version most relevant to Wellspring.
How They Combine
The common mistake is treating these as a single spectrum (capitalism ← → communism). They’re at least three independent axes:
Ownership: Who owns the means of production? (Private → cooperative → state → communal) Exchange: How do goods move? (Free markets → regulated markets → planned allocation) Power: Who makes decisions? (Direct democracy → representative → authoritarian)
This is why “capitalist democracy” and “capitalist authoritarianism” are both real things. Why market socialism isn’t a contradiction. And why Wellspring can use markets, reject conventional capitalism’s ownership model, and operate through democratic governance simultaneously — it’s a coherent position on all three axes.