What it's being proposed often as "capitalism" is not actually capitalism, is an aberration based on "anarchic market" driving toward concentration of wealth, disappearing of competition thru the estabilishment of super-monopolies from the multi-billionaire corporations etc...
Capitalism is based on a "free" market but "free" market is not an "anarchic" market like freedom for us is not the ability to do whatever we want, but to act in a subset of rule that guarantee maximum freedom for each one of us without infringing the one of other's. In particular, i believe the most important part of capitalism that people often forget is the ability to actually bargain. To explain it better:
- there need to be equal bargaining power from contractor to worker, or at least measures to keep the bargaining power as equal as possible. In a situation where contractors have too much power (aka. of price of product is much greater than the price of work), wages go down, then demands go down, and the two things enter a reinforcing loop and the economy collapse. In this case, short term investment may go up because you can produce with great gains, but then all the increased investment fall on a ground of no buyers for them.
In a situation where workers have too much power (aka. the price of work is greater than the price of production), production goes down, prices deflate, which make not investing a good perspective, which in turn mean production goes down again, in a reinforcing loop and then the economy collapse again. In this case, keeping your money in the bank (liquid) seems a good thing, but then there's no investment, aka no more production (and unemployement galore) and then suddendly all the money lose value because there aren't many things to actually buy. This , as far as i know, is not a realistic scenario as long as at least some other country in the world has low producing costs (in our world: asia, with africa probably next on the list), but it's also why the decrease of china's growth is seen with so much apprension, because they're essentially part of our own economy right now.
To avoid both of these scenarios, the state enforce a series of rules, you may know some of those as contract regulations, minimal wage, welfare state etc... It is of my opinion that we should give away most of those contract regulations and give only one form of it: basic income. Said basic income can then be directly regulated like tax rates are now by central banks to be high enough to avoid contractors having too much power, but not too high to avoid deflation (this is a problem until post-industrial societies when robots remove the need for humans to work, at which point i think we get essentially infinite production at 0 cost, which require all the wealth to be distributed without anyone of us having an actual mean to bargain for it, which is extremely unlikely imho).
- absence of monopolies on goods.
Monopolies remove competition, which is the "selection" force of capitalism, eventually removing the possibility for buyers to bargain via selection. No bargaining power = no optimization of the offer = stagnation -> underoptimization, lower growth, and in the worst case, collapse.
Absence of monopolies means that yes, we have to break up societies that get said monopolies, and place restrictive measures in the first place to avoid said monopolies to come to exist (examples? tangentially tax rates on the value of societies with tangential values defined at an arbitrary amount of our like, 10 b. $ example)
- on the other hand Monopolies on basic necessities are considered good (water-healthcare etc...) because private interest on said necessities would go against the ability to bargain that it's so important in capitalism: the bargaining power would be absurdly skewed toward sellers since buyers can't avoid buying. Said monopolies however, must be under the control of the state, to represent the best the interest of the collectivity in said basic necessities. Privatizing remove bargaining in those cases and as such is seen as counter-productive.
- private societies should never be big enough to significantly influence the state. The state has the extremely important mission of keeping the economy afloat with the manipulation of investment and savings. If private corps get too big and push for deregulations, they may see increased short-terms gain but then the whole society lose significantly as demands collapse, including said private corps. This also come back on the tangential cap on the value of societies to avoid monopolies.
Capitalism without regulations can bring growth in cases where you start from essentially scratch, but tend to vastly underestimate the importance of demand (for the simple reason that who create offer don't create demand) and can't expand as much as regulated capitalism, nor promote the distribution of wealth which is essential as economic growth is basically dictated by the equivalence of investment/liquidity. The "free market" which we often hear about (and which is not free, but simply non-ruled), is based on the assumption that offer create demand, which is largely not true (see also supply-side economics as a similar fallacious line of thought, and see how :" studies have shown that tax cuts done in the US in the past several decades seldom recoup revenue losses and have minimal impact on GDP growth.", Laffer curve and all that jazz ).
The problem with debating words is exactly that, we debate things which can have different meaning for different people, but honestly the ones that often propose "free market deregulate etc..." are just dumbos who have no idea how capitalism actually work and still believe in century old ideas that a super complex system left to itself will bring itself to optimization every time, which is absolutely not true for many reasons. The success of largely unregulated capitalism in progressing the society of three hundreds years ago shouldn't be an argument-end-all that way to say that there's nothing better, especially when there are so many arguments and examples to the contrary.
Non-capitalism will however be an option the moment machines that work better than us in every field exist. Since at that point there's no limit on the offer, but only on the demand, the economy will depend only on how much wealth will be redistributed. There will be no actual "competition" nor there should be any more bargains, because we as humans will have actually nothing to bargain with for the economy, our brain and our work being as useful to the robot society as ants are for ours. Money will lose most of its value, if not all. Honestly, i think this is a field of economic that is criminally understudied, especially since it's predicted that we'll lose about 20% employement in the next ten years in the industrialized countries alone. Creating new jobs will be just a temporary solutions as machines advances far faster than our bioligical evolution.
my 2c
