I am sorry you are being so dismissive of me and my opinions. People are inclined to say that “the books that confirm my opinions confirm the truth”. That is not necessarily the case.
Capitalism as a system is of course recent. The point is that private property is built into humans. The things that one uses are “mine”, not “yours” – every child fiercely defends this distinction. In hunter-gatherer societies private property was at a minimum, but land was never owned because it was always temporary. When agricultural societies came along, 10-12,000 years ago, land was “in common”; in practice it was at the direction of community leader(s). As cities developed, the need for finance increased. First, merchants provided finance to leaders for wars and other projects, then financiers. Financiers were hated for various reasons, in part because they showed that leaders were incapable of financing their own wars, in part because they had the temerity to want their money back with interest, in part because, in medieval Europe at least, they were often Jews, because Christians were forbidden to lend money at interest, and of course no one would lend money for mothing.
That said, we still need capital for projects (and wars). This is what capitalism does. We don’t like capitalists for some of the reasons enumerated above, but they are the ones who allocate capital. To design a society or an economy without capitalists, we would have to replace those people.
It is of course possible to set up a bank to fund projects instead of capitalists. But this would have to be done very very carefully. Any political influence, for example – put aside the moral question, because this is not about corruption or lack of it – would mean that the allocation of capital would be inefficient – it means that what would be funded would be projects that friends of the bank administrators, or maybe they would be people who were initiating projects that were in accordance with goals that the administrators liked. This is a recipe for how to lose the capital of the bank. To return to corruption, the biggest problem with corruption is NOT moral – it is that it distorts capital flows so much that the bank loses money and eventually goes bankrupt.
China is a great example. The allocation of capital in that country has been to preferred recipients and to preferred projects. This has led to a disastrous situation for finance in China. Xi Jinping has noticed and is trying to correct it, but it may be too late. Yes, it has created fortunes, but the problem is NOT too much capitalism – it is too LITTLE.
Market economics is about ensuring an efficient flow of money to profitable projects. It is always flawed, because all markets partake of market failures such as pollution and other harms to people – we call these “externalities” and agree that the external cost of such harms needs to be factored into the price of the product. That said, the base insight of Adam Smith is still valid: people buy (or rent – “acquire access to”) products because they think doing so will make them happier. Each person determines their own needs, and we only mess with those choices if the negative effects of supplying those needs outweighs the value of indulging in them. Illegal drugs and child pornography and such are banned because they violate that rule.
This very literally means that, IF you observe rules around protecting people from negative effects by charging for them, and also IF you prevent or regulate monopolies (big "if"s) then any company that is more profitable must by definition be helping more people find happiness.
So then your capitalists, or your allocators of capital, should be people who are NOT thinking up what THEY BELIEVE will be good for the population; they should be people who fund the most profitable companies within these constraints, and they should let the police deal with folks whose desires fall outside of what is socially useful. Because this is the BEST way we know of to ensure that people’s OWN definition of what is good is what they are allowed to follow, instead of someone ELSE’s determination of what their well-being SHOULD be (mostly).
Now in modern times we have rising inequality, and this is not good. It means that a large and increasing part of the population does not have access to capital, so they cannot go to college, cannot start a business – they don’t go to decent schools, they don’t have decent health care.
Now schools and health care exhibit what economists call “positive” externalities – they more or less pay for themselves by the well-being they create. So the idea that these should be private goods does not make sense. Even in the US, that seeming bastion of laissez faire capitalism, we have government-financed K-12 education, and substantially subsidized higher ed, and (shshsh – this is a secret) the MAJORITY of health care in this country is paid for by the government. Probably it would make sense, from the point of view of purely technical measures of well-being and the financial benefits thereof, to increase these.
The fact that Jeff Bezos has wealth of over $200 billion is not a function of greed. He started a company which is very beneficial to the population, and its profit level shows this. That said, this figure has been hugely inflated by the Federal Reserve’s stimulus to the US economy – that stimulus has created a ton of money, which instead of inflating the value of goods and services has inflated the value of assets – stocks & bonds, real estate, etc. Not good. The stimulus checks that put money into every taxpayer’s hands were more beneficial. Unfortunately this was paid for with government debt. The Fed’s stimulus was created from nothing. I’m beginning to think the Modern Monetary Theory people have somewhat of a point: that if the economy is doing poorly, stimulus for the citizenry should be created from nothing, and then mopped up later if inflation gets too high by the Fed. They tend to get expansive about what they want to fund with this money, not all of which I agree with. But some of those projects have such strong positive externalities that sure, they do make sense – universal child care/early education, for instance.
Allocating capital needs to be done in such a way as to follow the profits (within the constraints as described). If capitalists do it or banks run by bureaucrats is not what matters – what matters is the principle of using profit (properly constrained) as your measure of well-being.
