The term is used to claim that many economies purportedly practicing capitalism (an economic system characterized by a laissez-faire free-market system) actually have significant state intervention and partnerships between private industry and the state.
Critics point to the use of regulation to avoiding economic problems such as acute commodities fluctuations, financial market crashes, monopolies and extensive environmental damage as examples of how capitalism as defined does not match actually existing capitalist economic systems.
[citation needed] The core characteristics of capitalism are (1) the production of commodities[3] which are exchanged on a market;[4] (2) wage labour,[5][6][7][8][9][3] and (3) capital goods are in the sphere of private property,[4] as well as public,[10][11][12][13][14] rather than common property.
Proponents often believe in rational utility maximisation on the part of consumers and presuppose perfect competition for economic models.
Free-market capitalism as defined cannot exist and any economy that claims to be capitalist in this sense is actually some other type of economic system, i.e. only has some free-market capitalist features.