I think the linked answer does a good job of covering the question from a theoretical perspective, particularly as focused on historians of the modern era, but I also think this is some use in providing further definitions of capitalism: you can think of capitalism as an activity undertaken by (typically capitalists) in which someone invests capital (typically but not necessarily money) in some sort of enterprise (typically productive or mercantile) in the expectation of profit. This is a very broad definition, and the activity so described goes very far back--one of the most compelling examples comes from Kultepe/Kanesh, near modern Kayseri in central Turkey. Here there was an Old Assyrian merchant colony that flourished in the early second millennium BCE and they left truly wonderful documentary remains, I believe still peerless in the ancient world. From this we can see a very vibrant commercial society, with complex markets and investments chasing shifting profit opportunities under the guise of canny merchants. They behaved in many ways strikingly like modern capitalists, so should we say that there was a capitalist society?
Probably not, if you think of capitalism as a system. There were people who were behaving in the ways that modern capitalists do, but they did not constitute the dominant strata of society and they did not dictate the fundamental questions of the distribution of power and resources. And probably they could not exist, capitalism as a modern system requires a lot up front, in terms of state capacity, legal systems, standardization, and probably technology in order to operate. Going back to Rome, this is more or less the argument that Dennis Kehoe has made: Roman elites certainly had the inclination to make profit and investments, but ultimately they were constrained by the nature of their circumstances. This is, if it is not already clear, more or less my perspective: there was much of what is called in Chinese scholarship "sprouts of capitalism", such as wage labor in cities and the countryside, a vibrant array of investment opportunities, a string monetary system, productive improvements through technology, even something of a middle class etc, but there was no joint-stock company, no Board of Trade or Chamber of Commerce, no nabobs of the East Mediterranean Company.
For Kanesh, Ancient Kanesh: A Merchant Colony in Bronze Age Anatolia and this fun review article. The Kehoe book is mostly Law and the Rural Economy in the Roman Empire. For the vibrancy of the economy and dynamism of its society, Meyer's The Ancient Middle Classes.
Edit: To prevent it from getting buried, I would recommend also reading the detailed response by /u/unkosan in order to better see the theoretical grounding, and see a frankly more directly answer the question than I gave.
I am providing a link to a past post on this subreddit, r/AskHistorians, that is the same line of questioning as your own. It is well-regarded for the quality and thoroughness of the answers, especially from u/unkosan. If you continue to have questions, you can freely make a comment here (your post). Hopefully this helps!
May I answer that from a more economist/philosophical/linguistic point of view? The answers contained in past posts, mentioned by r0kuz, provide a historical background, although not a comprehensive one, but I feel the tone of the question deserves some supplementary considerations. Not to give some normative answer, but, instead, present some different point of views that might escape the reader who is not into the fields of economics or philosophy, in order that he might make the best critical use of the available information.
First of all, historically, the term "capitalist" (referring to the owners of capital, the term capital being an early term for "asset" that initially referred to cattle heads) started being used in the modern era, being utilized scarcely in pamphlets like the Hollantse Mercurius, by early economists like Arthur Young, and even post-smithian mainstream economists like David Ricardo. The term "capitalism", however, started being used by socialist authors like Louis Blanc and Proudhon, and became universal thanks to it's use in The Capital by Karl Marx.
So we can safely state that "capitalism", as a concept, was initially developed inside the scope of socialist theories of society. This might be one of the reasons, amplified by the cold war, by which a duality arose between "capitalism" and "socialism" as economical systems. One of the possible points of view about the subject is that such a duality exists: that is, either you have a capitalist society or a socialist one. This sort of point of view was taken to the extreme by some authors of the austrian school of economics, such as Rothbard and Hoppe, which equate capitalism with private property. Depending on the author, this might mean either that every free commerce society is capitalist, or even that "true capitalism" never existed.
In both The Capital and the Communist Manifesto, however, Marx and Engels seem to fundamentally distinguish between the capitalist society of their time and the feudalistic society that came before (one represented by the nobility class and the other by the bourgeoisie class), so we might say they did not abide by such a rigid duality, at least three forms of society being possible.
A typical Marxist (but not only Marxist, anyone can think about the subject this way) definition is, like mentioned by Tiako, that capitalism is a system were the "capitalist" is the dominant class, so that we have a fundamental distinction between older free market societies and the current system.
One thing I find extremely important to mention, but that goes beyond history and into the realm of linguistics and philosophy (but nonetheless is useful to have in mind in any discussion in historiography about the meaning of words), is the distinction between a definitional approach and an empirical approach. Previous answers in older posts fail to acknowledge this distinction and only discuss definitions of capitalism, thereby favoring a definitional approach. However, if the only way to establish the meaning of words was through definitions, we would reach something called the symbol grounding problem, were every definition would ultimately either be circular or lead to an infinite regression. Many words, such as "dog", "climate", etc, have their meaning established not by a definition, but by a reference. That is, they are defined by that which they reference to. Sorry if that sounds abstract. But, in practice, this is very important in economics, philosophy and sociology, when the meaning of a word like "capitalism" is debated. One approach is to abstractly define capitalism, in such a way that any economic system that came before the modern era could potentially be capitalism. The other approach is to define capitalism not in an abstract way, but in an empirical manner, as a specific phenomenon that happened around the industrial revolution. In this sense, any definition of capitalism would be only a way to model it, in the same way as an equation might try to model the climate, but without being confused with the climate itself. In the same way that the observation of the climate might disprove the equation, the observation of capitalism as a specific phenomenon might disprove the tentative definition.
Historically, the economic context of that age involves much more than merely private property. In the first place, what is meant by property was extended to a wide range of new sorts of abstract property rights and contracts, such as banking contracts beginning in the late middle ages, the stock contracts beginning with the east india company, intellectual property and so on. Another difference is the increasing importance of machinery as a means of production instead of mainly land. Private ownership by stock owners of abstract symbols (such as trademarks), management structures, and the labor, both physical and intellectual, of a loosely located group of people, all this under something called a "company" and tied together by new kinds of contracts, are new trends of the post-industrial society. As mentioned by sk-88, limited liability is also an extremely important, often overlooked, aspect of that society. Not to mention the stock markets. All of this can be used in a tentative definition of capitalism, which would distinguish it from merely "free market" or "property rights". In other words, in which sense the market is "free" (that is, what exactly are the rules), what does and what doesn't constitute property, etc, are all things that profoundly distinguishes the capitalism of the XIX, XX, XXI centuries from other free societies that came before. Instead of making a judgment, I mention all of this as potential ways to make a fundamental distinction.
So a final consideration is that, like mentioned by r/unkosan in the other post, capitalism is a very elastic term, with very different definitions by different authors and different assessments about what societies were or were not capitalist. What the vast majority of them agree, however, is that the political/economical system that developed around the industrial revolution was capitalism. So we might understand that authors agree in terms of the reference aspect of the term (what is it that it references to, as a phenomenon) and disagree about the modeling aspect (the abstract definition that would better capture the phenomenon).
I hope that this answer is not too philosophical for the community. I give it as a complementary commentary on the past answers, which might help to disperse the confusion which the OP and many other readers might still have about the term, by providing a framework by which they might analyze claims about what is or isn't capitalism, distinguishing between the two kinds of ways that a word might be understood.
/u/r0kuz has kindly linked my earlier answer to a similar question. The central point there was that the answer to your question depends on how you define capitalism.
In retrospect I regret not addressing the question more concretely, so I would like to do that here. Let's take a specific definition of capitalism, see how it deals with the historical period in question, and look at the (theoretical) assumptions behind this definition.
I. Definition
I think it's fair to use Marx's definition of capitalism for this exercise. This is because, as /u/gamechanger4r notes, we talk about capitalism today in large part because of Marx. I also think that "capitalism" is really only fully coherent in a Marxist or marxisant theory of history, but we will get to that later.
As Michael Krätke points out in his essay in The Marx Revival, Marx actually rarely uses the term "capitalism" (kapitalismus). Instead, Marx rather consistently uses terms like "capitalist mode of production," "capitalist production," "bourgeois form of production," etc. This is to highlight that for Marx, capitalism is a historically specific form of organization of the more general social production process that must occur in any kind of society if it is to reproduce itself.
To be brief, capitalism for Marx is characterized by the organization of production by and for the accumulation of capital. "Capital" in Marx's economic theory refers to "self-expanding value," or value (initially in the form of money) that creates more value (the initial increment of value plus a "surplus-value").^1 This value is then reinvested to restart the process over again; this is referred to as the "accumulation of capital."^2 In order to value to really self-expand, however, the value-producing factor (labor-power) must also be a value to be bought and sold for money. Hence, for Marx, wage-labor is the presupposition and central moment for capitalist production. In short, we can summarize Marx's model of capitalist production in the form of the so-called "circuit of money-capital": money (M) is invested in commodities (C) in the form of means of production (MP) and labor-power (LP), which produce (P) different commodities (C') to be sold on the market for a greater sum of money (M' = M + ΔM). M' is then reinvested to start the process over again on a greater scale. I have created a diagram that illustrates the process.
Marx further assumes competition between capitals:
Free competition is the relation of capital to itself as another capital, i.e. the real conduct of capital as capital. The inner laws of capital - which appear merely as tendencies in the preliminary historic stages of its development - are for the first time posited as laws; production founded on capital for the first time posits itself in the forms adequate to it only in so far as and to the extent that free competition develops[.]^3
In plain English: capital has a natural tendency to self-expansion. This brings it into competition with other capitals. Less successful capitals become absorbed into larger ones or go out of business entirely; consequently, in order to survive, each capital is now forced to accumulate capital in order to compete. This gives capitalist production a "coercive" character, in that the accumulation of capital becomes an end-in-itself.
It is this "end-in-itself" quality to capitalist production that differentiates it, for Marx, from earlier kinds of profit-seeking production. The lord of a demesne (again, according to Marx) might produce wheat for the market in order to get money, but ultimately only in order to purchase luxury goods for his conspicuous consumption; he is not compelled to accumulate capital. Likewise, a peasant farmer who sells even the majority of his produce in order to purchase his necessities is not accumulating much of anything, much less "capital" (which, again, for Marx, presupposes wage-labor).
II. Application to Ancient Rome
So we have a (simplified) Marxian model of capitalism. How does this apply to ancient Rome?
Firstly, we have extensive evidence for wage-labor on Roman estates. For an example from Late Antiquity, we have the famous Apion estate at Oxyrhynchus (cf. Peter Sarris, Economy and Society in the Age of Justinian). Jairus Banaji likewise mentions that there was widespread use of wage-labor in fourth century Rome.^4 Temin notes that "workers in large enterprises, like mines and galleys, were paid wages[.]"^5 So there were, in fact, market-oriented enterprises using wage-labor in ancient Rome; we might be comfortable calling these "capitalist." (Marx himself notes capitalist production "may also occur sporadically, as something which does not dominate society, at isolated points within earlier social formations."^6)
However, I don't think anyone denies that the mass of Romans were in fact peasants, people who owned or leased land and produced primarily (although not exclusively) for subsistence. This does not mean they had no interaction with markets, but that their interaction with markets was (1) not predicated on wage-labor and (2) not done with the accumulation of capital as its fundamental aim. Peter Temin, certainly a good example of a "modernist" on the question of the Roman economy, himself says that something like 75% of people in the Empire were farmers and that "most of each farm's activities were devoted to maintaining its workforce."^7
Recalling our discussion in the first section, it is perhaps possible to identify some elements of capitalist production in Roman society along Marx's lines, but it is certainly not a society "in which the capitalist mode of production prevails." (Marx, Capital 1, page 125).
III. The background assumptions of the theory
So, according to Marx's own understanding of capitalism, the Roman economy cannot really be fairly described as "capitalist." But Marx's definition is not the only possible definition. It only makes sense according to certain background assumptions.
The central assumption is that there are fundamentally different ways of organizing production that lead to different developmental tendencies or "laws of motion." Marx argues that production is always production in a specific historical form, and that each historical form requires its own theory of development; hence, "capitalism" is a coherent category for him, because it is a theoretical object that requires its own set of tools. But if you assume, as many modern economic historians do, that all of economic history can be understood using a single theory (neoclassical economics), then there is really no need to place such special emphasis on "capitalism" vs. "non-capitalism." Indeed the distinction becomes entirely arbitrary.
This brings us back to the point I made in the linked post. When discussing this question, it is necessary to specify which definition of capitalism is being used, and for what purpose. I would argue that "capitalism" as a theoretical object only makes sense when you subscribe to the theory of modes of production; otherwise, it becomes an arbitrary classification, arguably less significant than others (e.g. agrarian vs. industrial, industrial vs. post-industrial, etc.). To that end, you have to ask yourself whether it makes sense to use the term at all.
1: Capital vol 1, chapter 4
2: Capital vol 1, chapter 24
3: Grundrisse, p. 650 (Penguin edition)
4: Exploring the Economy of Late Antiquity, 16
5: The Roman Market Economy, 118
6: Capital vol 1, 1022
7: "A Market Economy in the Early Roman Empire," Journal of Roman Studies, p. 180
In academia, this is/was actually quite a hornet's nest. The other posts here more or less mirror the "modernist" views of the ancient economy, so let's take a look at the "primitivists" who arguably dominate the discussion within ancient history itself (and from whom you probably heard your above point).
According to Moses Finley (perhaps the most influential ancient economic historian to ever live and a primitivist - so influential in fact, that this is sometimes called the "Moses Finley Debate"), there are a few major things that differentiate Rome's situation to that of a modern capitalist society.
There was no widely understood "concept" of economy in the way we understand it. Even the word had a different meaning at that time (from the Greek "oikonomos" which is more to do with home management) which is important because it severely localises the average Roman's conception down to almost the individual/family/local level.
He majorly emphasises the role of social status making economy very very subservient to that goal. High status individuals could not be seen to be "trading" for example (though in reality they could use intermediaries). Again, that was due to status. The goal was never wealth per se but simply cementing social position in the "right" way (Actually S. Dixon wrote an interesting paper likening the status games of the Ancient Romans to the "big man" culture of the Italian-American Mafia where wealth is important, but "respect" is paramount). In this way, resource allocation was determined by social status concerns rather than capital or market efficiency.
A practical example of this was argued by Richard Saller, who noted that individual cities experiencing shortages of grain (when other cities were not) would rely on Imperial Decree to be supplied rather than just increasing the offer price as modern economics would suggest they might. Hence status trumped economics, and the markets were not integrated (remember the local concept of economics?).
Allocation of resources was widely written about in moral terms rather than economic (Aristotle, Plato etc). Money lending was very frowned upon for moral reasons etc. Xenophon was probably a little more "economic" but even there there was a lot of moralistic language about fairness and the like. Their influence on the Romans was huge.
Land was also seen as a vehicle to status rather than profits. It needed to be sustainable, but working a farm was a status thing. I think it was Pliny (or maybe Cato) who talks about working a farm being superior way to get fit than going to a gym. Cato talks a lot about farming, but very little about the economics of it. Again, all to do with status.
If you want to dig down further (and there is a LOT further you can go with his arguments), the "Finley / Polyani Orthodoxy" is worth chasing up as there is a cabal of ancient historians and archaeologists who follow his reasoning.
And it's also sparked about a billion articles both pro and con.
As usual I'm going to wade in late and say that responses here are all valid, useful, and interesting. Allow me to add a few missing pieces...
If we define a capitalist society as a "market society," then plenty of historians agree that by the end of the Roman Empire, a market society had clearly emerged (although in general, archaeologists tend to be more likely than historians to see the ancient economy as lively and competition-based). This really goes back to the modernist vs. primitivist debate in economic history (between those who view ancient economies as fundamentally like ours and those who see them as fundamentally different), which aligns closely with the substantivist vs formalist debate (to oversimplify: those who see economies as defined by what they do vs those who study the stated rules). In terms of both debates, the first groups are more likely to see ancient Rome as a capitalist/market society, the second are less likely.
Another point of order is that modern capitalist economies are defined by "rational" capitalism (i.e. competition within a free market) whereas ancient Rome seems to have been more attuned to "political" capitalism. Who had access to tax revenues, foreign revenues, and slave labor? These folks were the ruling class --- not entrepreneurs and capital investors.
Lastly, if we are going to call ancient Roman a capitalist/market economy, then we must accept (contrary to many modern theoretical outlooks) that capitalism can exist without:
For general reading on this matter: Bandow, Alyssa. 2013. “THE LATE ANTIQUE ECONOMY: APPROACHES, METHODS AND CONCEPTUAL ISSUES.” In Local Economies?: Production and Exchange of Inland Regions in Late Antiquity, edited by Luke Lavan, 15–40. BRILL. https://doi.org/10.1163/9789004309784.
One of the key features of Capitalism is a “market of markets”, meaning that there are fungible vehicles for assigning capital that can themselves be traded.
Direct investment is just that. You give a business money for a stake in production. The transaction is solely and directly between capital and entity. It’s an individual contract between unique parties.
However, fungible products that represent investment purchased via a third party - brokers - are part of what makes Capitalism unique. It’s the idea that capital has its own markets - a stock exchange, a bonds market, a commodities exchange, etc - that don’t involve direct transactions with the entities in which that capital becomes invested.
Amazon is not directly involved in every trade of Amazon stock that occurs. Capital is free to trade fungible, exchangeable products and vehicles that represent investments (ownership) freely. This liberalization of capital from the direct investment model is really what sets modern Capitalism apart from other market economies.
Things like collective/hedge funds, treasury bills, hostile acquisitions, etc all depend on this system, and the system of integrated banking that makes it possible. Without the various infrastructural and legislative frameworks that allow the free flow of capital across markets and economic systems, you are stuck with individual contracts between private entities.
Where that cutoff point is in history, I couldn’t say. But prior to modern Capitalism, how would a regular person invest their savings? You had savings accounts, which paid out via bank loans (as loose a definition as possible), but you really didn’t have “average investors” until you have liberalized access to stock markets.
What that accomplishes is that far more capital is made available to be put into the system - no private entity is giving you a share of their profits for $20 if you walk in and try to contract a direct investment, that’s absurd. But now you can, by buying shares on the exchange.
So in this way, the focus of Capitalism isn’t on markets, it’s on the market of markets. It’s concern is the liberalization of capital, hence the name. How capital is allocated in the most efficient and most adaptable way possible.
Markets have always existed, from direct bartering to goods trade, to fungible currency. As has investing, from shared labor to raw materials, to direct currency investing.
But not until you have a market of markets do you have the picture of the modern economy, freely accessible, with market forces playing out instantly and dynamically, which is a huge part of the supposed defining characteristics of Capitalism.
So to kind of tl;dr, I would say look for when issued stock that is sold on exchanges replaces the direct investment model, and that’s where I’d put at least some sort of fundamental difference divide.
(Of course, very little works the way the Capitalists claim it does - my statements are those of the adherents for theory’s sake, not my own views)
Slavery was the big difference between Rome and early-modern capitalism in Europe (leaving aside colonies).
There are many societies in which slavery existed as a peripheral institution, but few in which slave labor was the primary source of elite incomes, as was arguably the case in Rome under the later Republic and the Empire. A monetized, commercialized slave economy is closely similar to a capitalist one, because large-scale slavery only really pays when the focus is on production for market sale rather than subsistence. The high overhead costs of supervision (and other dangers) make it not worth the effort without profitable markets.
The main difference is that in a capitalist economy, free labor moves towards areas of highest return, while in a slave one the owners of slave labor move the slaves. In both systems, the factors of production move in accordance with market pricing signals.
This makes it much more similar to capitalism than either is to a classical manorial-feudal one, in which the factors of production are deliberately immobilized and custom, rather than market returns sensu strictu govern their allocation. Mind you, ideal types never completely represent reality on the ground.
Also, slave labor allows things which are much rarer under a capitalist regime; for example, centrally-directed latifundia using gang labor. This can be very efficient as an agricultural enterprise (as in the American South in the antebellum period), with economies of scale and extremely high labor-force participation, but labor has to be either very abundant or controlled by extra-economic coercion to make it possible. Usually tenancy works better in a free-labor system. In turn, this means that where slave labor is abundant, types of agricultural investment pay well which don't in a free-labor regime.
Throw in that in classical era Graeco-Roman societies, there was a strong cultural bias against free workers working for wages on a regular basis for a single employer. That was too close to slavery for comfort, and while willing to do things like hiring on for a harvest or for day-labor, free workers were reluctant to undertake long-term commitments of the type we're familiar with.
