See

http://mises.org/story/2099#6

While I’ve said I don’t want to dwell on terminological issues, I can’t resist making a point about “capitalism” and “socialism.” Rand used to identify certain terms and ideas as “anti-concepts,” that is, terms that actually function to obscure our understanding rather than facilitating it, making it harder for us to grasp other, legitimate concepts; one important category of anti-concepts is what Rand called the “package deal,” referring to any term whose meaning conceals an implicit presupposition that certain things go together that in actuality do not.[11] Although Rand would not agree with the following examples, I’ve become convinced that the terms “capitalism” and “socialism” are really anti-concepts of the package-deal variety.

Libertarians sometimes debate whether the “real” or “authentic” meaning of a term like “capitalism” is (a) the free market, or (b) government favoritism toward business, or (c) the separation between labor and ownership, an arrangement neutral between the other two; Austrians tend to use the term in the first sense; individualist anarchists in the Tuckerite tradition tend to use it in the second or third.[12] But in ordinary usage, I fear, it actually stands for an amalgamation of incompatible meanings.

Suppose I were to invent a new word, “zaxlebax,” and define it as “a metallic sphere, like the Washington Monument.” That’s the definition — “a metallic sphere, like the Washington Monument. ” In short, I build my ill-chosen example into the definition. Now some linguistic subgroup might start using the term “zaxlebax” as though it just meant “metallic sphere,” or as though it just meant “something of the same kind as the Washington Monument.” And that’s fine. But my definition incorporates both, and thus conceals the false assumption that the Washington Monument is a metallic sphere; any attempt to use the term “zaxlebax,” meaning what I mean by it, involves the user in this false assumption. That’s what Rand means by a package-deal term.

Now I think the word “capitalism,” if used with the meaning most people give it, is a package-deal term. By “capitalism” most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by “capitalism” is this free-market system that currently prevails in the western world. In short, the term “capitalism” as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.

And similar considerations apply to the term “socialism.” Most people don’t mean by “socialism” anything so precise as state ownership of the means of production; instead they really mean something more like “the opposite of capitalism.” Then if “capitalism” is a package-deal term, so is “socialism” — it conveys opposition to the free market, and opposition to neomercantilism, as though these were one and the same.

And that, I suggest, is the function of these terms: to blur the distinction between the free market and neomercantilism. Such confusion prevails because it works to the advantage of the statist establishment: those who want to defend the free market can more easily be seduced into defending neomercantilism, and those who want to combat neomercantilism can more easily be seduced into combating the free market. Either way, the state remains secure.

I don’t mean to suggest that evil statists have deliberately conspired to corrupt our language to serve their own nefarious ends. That sometimes happens, of course, but it’s not necessary. Rather, a perverse invisible-hand process is at work: the prevailing use of the terms “capitalism” and “socialism” persists because it serves to preserve the statist system of which it is a part. Think of it as spontaneous ordure. (Sorry.)

If “capitalism” and “socialism” are such potentially confusing terms, should we be even more cautious about the loaded term “anarchism”? Actually, I don’t think so. People’s initial associations with the term may be more negative, but they’re also more superficial: people are much quicker to admit that they don’t know much about anarchism and aren’t sure what anarchists really stand for than they are to make analogous admissions about capitalism and socialism. It also highlights the distance from other views and thus makes compromises with or backslidings into such views harder to gloss over. Plus the term “anarchism” has the advantage of sounding exciting and radical, which gives it a certain appeal, especially among the young.

and reject US prohibition will be a virtual paradise (although it might take a few years, and might be subject to US military invasions and assassination attempts).

Would, not might.

The first country to embrace capitalism, and reject US prohibition will be a virtual paradise (although it might take a few years, and might be subject to US military invasions and assassination attempts).