(A repost of part of my “The End Of 20th Century Democratic Capitalism” post. I wanted this piece separate to link to.)
The claim underlying libertarian capitalism: that it is the best way to reliably satisfy human needs and desires in a way which maximizes liberty, has failed. It cannot reliably feed, shelter, or care for a population and it has left the entire world to the mercy of the very wealthy.
During the build-up of libertarian capitalism, when it was accepted dogma, there were all these arguments made that, despite a lack of law and regulation, despite the whole thing working like a bucket of fiddler crabs, each one striving to climb to the top of the heap over the bodies of all the others, the goal of making a profit would result in a emergent stable and productive economic order with unprecedented personal liberties for all.
Oh, sweet naïve capitalists.
Just as grades in a grading system where the stakes are high and there is no discipline, self or imposed, go to the cheaters, profit went to those who cheated. Instead of a stable, productive economic order we got one in which the majority of actors did the minimum work for the maximum profit, and quality and safety be damned. The very wealthy determined that the best way to extract the most profit from workers was to move the work to places where workers had the worst negotiating positions. Profit-seeking business owners each specialized in what they felt they could make the most profit at, resulting in long supply chains. One shock: widespread systemic financial fraud, a change in trade policy by a major actor like the USA, a rise or fall of a major input like petroleum, an epidemic, a panic, and the whole thing breaks.
If this has failed – and it has – what do we put in its place?
Part of an answer has to be the creation of stable, well-funded social institutions which are not primarily based on making a profit. At the same time, checks and balances are required. Focusing all power in a single organization – a single branch of government – is a path to corruption.