People who support capitalism as a social system usually mean markets, economic freedom, and property rights. Those who oppose it think of “unbridled Laissez Faire,” meaning people hurting others while doing whatever they want. Laissez Faire literally means “Let them act,” so, in a practical sense, it means minimal governmental interference in the economy beyond protecting the rights of individuals from violation by others. The term can be thus be appropriately applied to capitalism in a positive or negative sense, depending on one’s interpretation of the role of government and what rights individuals have.

A charge often levied against capitalism is that it promotes consumerism, the glorification of extravagant spending on trivialities. It is usually accompanied by the idea that the poor are poor because the non-poor consume too much, and that if people would just quit consuming so much, there would be more left over for the others. Anti-market forces want government to mitigate the consumption through market intervention.

It is profoundly ironic that the present consumerism itself is the direct result of government intervention. It is founded on the dangerously false notion inherent in popular Keynesian economics that economic growth is built on aggregate demand or consumption, and that it is government’s job to spur that consumption using fiscal and monetary policy. Economic bubbles and their ultimate collapse, often implicated as a weakness of capitalism, are actually the result of government stimulus programs and inflationary policies that distort economic incentives.

The definition of capitalism that people most often hear is the private ownership of the means of production, as opposed to government ownership and control under socialism. Unpleasant billionaire tycoons with large factories and big money bags come to mind, but capital is nothing more than accumulated wealth. The money you have in a bank or retirement account is capital. It is held to earn money now or to allow you some benefit later. You are a capitalist. Investments in labor-saving appliances allow you to save time and thus produce more of what you want, whether that is more income or more hours of enjoyment with friends and family.

Every person’s capital, whether it is a business he or she owns, a home, a vehicle, or a retirement account, results from production of some sort by someone. A government can only give benefits to some by taxing the production of others, by borrowing the production of others, or by inflating away the value of the production of others through monetary expansion. All wealth is simply non-consumed production.

Consumption is the destruction of wealth. The pool that you install in your back yard is capital in the sense that it will likely add some value to your property that you can recover on its sale. Since the added value will likely be less than the cost, it is probably not a good investment. You will have consumed your accumulated wealth by the difference, but that isn’t necessarily a bad thing. Much of the joy we get out of life is due to some type of consumption, and the purpose of capital accumulation is to allow us to produce more of what we want to consume now or in the future.

A society progresses by accumulating wealth, and an advanced society is one where the people have learned to consume less than they produce over a long period of time. Consumerism for its own sake is thus not a good thing. Society, however, is made up of individuals who have their own goals and assumptions. Their consumption and accumulation patterns are nobody else’s business, as long as they do not consume more than they produce and become dependent on the production of others.

Dan McLaughlin is the author of “Compassion and Truth-Why Good Intentions Don’t Equal Good Results.” Follow him at daniel-mclaughlin.com.