The aim of this book is to define the nature of capitalism. But our understanding of that system has been impaired by the deep corruption within the social sciences of key terms such as property, exchange, markets, and capital. Using a new theoretical approach called legal institutionalism (which differs profoundly from both Marxism and much pro-market libertarianism) this book defines these key concepts clearly, and establishes the constitutive role of law and the state within capitalism. Capitalism emerged fully in the eighteenth century, when developments in financial institutions enabled a take-off in production and trade. While markets are central to capitalism, it is not simply a market system: unavoidably it contains different subsystems of governance, production, distribution and exchange. Furthermore, capitalism cannot in principle have markets for everything, or bring everything under within the orbit of commodity exchange. The book further considers the global development of the system in the twenty-first century, including the implications of increasing knowledge intensity in production, the challenges to US hegemony from China and elsewhere, and the drivers of inequality within the system.