The Libertarian Partisans and the anarcho-capitalists insist that there's no difference between the terms 'capitalism' and 'free market'. I, on the other hand, am devotedly in favor of a free market and not so hot on capitalism.
If a 'market' is a system of exchange, and 'free' means that it is voluntary, that is to say, uncoerced, then a 'free market' is a system in which all voluntary exchanges are permissible and all involuntary exchanges are impermissible.
The term 'capitalism' on the other hand is about capital -- a surplus of stored value in a system of commerce. Capitalism, in and of itself, does not require a free market, as evidenced by the fact that we in the United States live in a state capitalist society without a free market. Anarcho-capitalism is the advocacy of a true free-market capitalism: a radically free system of commerce.
But notice, we've switched from "voluntary exchange" to "commerce".
In September 1886, Lillian Harman (daughter of Moses Harman, the editor of Lucifer, the Light-Bearer a proto-feminist journal) and E.C. Walker (co-editor of Lucifer) had a non-state, non-church marriage. They privately agreed (a verbal contract) what marriage would look like between them, and they gathered friends and family to celebrate the contract and announce some of its conditions. They were promptly arrested for presuming to marry without government license.
I would argue that they had a free-market marriage: all voluntary exchanges are permissible. I think it would be absurd to argue that they had a capitalist marriage.
Similarly, I could gather a couple dozen friends and loved ones together and form a radically egalitarian commune -- no private property, no commerce, no competition. If we lived outside the constraints of the State, and if we refused to use proactive force against each other, we'd be anarcho-communists. Again, that's consistent with a free market, and it's antithetical to capitalism.
In denotation, capitalism is about capital and commerce. In connotation, capitalism is about the commercialization of society and the commodification of values. Free-market capitalism is about those things in the context of open competition. Competition has gotten a bad rap among left-liberals -- it is in fact a great meta-strategy for testing a diversity of approaches to a problem -- but I personally put an equal emphasis on cooperation.
I am a philosophical anarchist and an unwavering individualist, but I am by no means a capitalist, and I'm not sure why the term keeps coming up when individualists talk about freedom.
-- bkMarcus