It's not capitalism. Capitalism is a good economic model (perhaps the best available) for most industry sectors. What's missing is, legally, better government regulation, and, culturally, a sense of corporate responsibility.
In essence, isn't that saying that it's a good model as far as its potentials for heinous abuse can be checked? Though I guess that reduces to any model, since ultimately human nature is what must be kept in check.
"Capitalism" is a system whereby people can go into business for themselves, i.e., develop a product or service, own the means of production, and earn profits on the revenue. That premise spurs economic development and ultimately a better way of life. We owe life as we know it to the capitalist model.
Today our economy is being strangled by parasitic large corporations that enrich themselves without adding equal or greater value to the economy, and by a short-term-profits obsession among financiers and investors that comes at the expense of long-term fiscal sustainability...and
not by the fact that I can open a restaurant and sell ice cream. These problems are mainly the result of abuses within the capitalist system, rather than structural flaws inherent to the system. As I have indicated before, a capitalist economy must be well regulated to prevent these and other abuses, but that regulation is still subservient to the capitalist paradigm--it still accepts the basic premise of private enterprise.
I suspect the word has become so general that it causes obfuscation when used in communication.
A minority of our problems actually are the result of capitalism itself. They are not structural flaws, but jurisdictional ones. Strict capitalists must apply the capitalist paradigm to all economic activities. That's a logical fallacy because the essential value of some economic activities does not correspond to those activities' direct profitability. One such example is the education of children. Educational facilities can be made profitable, but their essential value, by which I mean the primary benefit of their existence, has nothing to do with their profitability. A strictly capitalistic view of the educational system could only endorse the premise of money-losing schools in the wider context of education as an investment in labor. Not coincidentally, that is why the modern school system took form in the first place. Industrialists desired a better-trained workforce, and community leaders desired a more competitive public. The capitalist view hits several limiting dicta, however, which amount to a lack of accessibility to a better-rounded education on economic grounds. In effect, capitalism promotes only training, and not true education. That's a brick wall on the road to a better society. Therefore, due to the essential value of education, the educational sector should be public, not private. It should be planned, not market-driven.
To put it simply, I am a capitalist wherever profits do correspond to the essential value of economic activities, and a socialist wherever they do not. In functional terms I support a mixed economy. I uphold the tenets of private ownership, free enterprise in general, and wealth accumulation, all within the context of a robust system of regulation to preserve competition, protect consumers, steward the environment, and penalize abuse. That's capitalism, but the opposite of laissez-faire. Meanwhile, whenever the capitalist model fails to correspond to the needs of an improving society, I favor the socialist model of serving the public welfare specifically rather than the public's economic proxy, profits. Besides education, other sectors which capitalism cannot maturely address include (but are not limited to) healthcare, utilities, transportation, defense, and energy.
It is important to understand that capitalism does not own a monopoly on innovation. Many crucial technological advances are made possible by the public dole, because private companies will not spend money on their research after determining that the costs of research or the subsequent market potential of any likely applications were "a losing proposition." I gather that most people in our country do not understand how innovation can occur without somebody hoping to make big money from it. The reality is that those areas of the economy where I would apply the socialist model have just as much room for innovation. Many avenues of research and development readily suggest themselves. Many more avenues can be discerned with effort. These avenues suggest jobs, and those jobs will almost always be filled if they offer a decent wage. To wit, though the free market would not develop a system of universal education for children, government certainly does. Innovation within the public education system is limited primarily by the availability of taxpayer funding and secondarily by the demands imposed by law and more pertinently by the educational authorities in local, state, and federal government.
I defer to capitalism where capitalism benefits society because capitalism is so efficient. Socialism is not as efficient, in my understanding because it is not as agile, and that extra cost of relative inefficiency is only warranted when the public welfare is at stake. I don't want the government to own the video game industry. That statement, however, reflects the bias of our society against public ownership. In reality, such a statement is nonsensical. It's inverse is what is actually true: I want to be able to own my own video game company, make whatever games I want, and profit from it. "The government" wouldn't necessarily stop me from making whatever games I want, or even from profiting from them, to the extent I might earn a share of any profit that does accrue. However, if the government owned the video game industry, then I would not be able to own my own company, and I would have that much less control over my creative efforts.
It gets really interesting when we get back to the question of education and propose concepts like "Josh's Academy of Critical Thinking for Unfettered Personal Success in Humanism, Intelligence, and Talent" (JACTUPSHIT). Such an endeavor would concern itself directly with the public welfare, and whether or not I might like to own it myself and become stinking rich, I would have to content myself simply with running it. I find the premise of a public JACTUPSHIT to be eminently tolerable, provided the government would cooperate with me in a sane and consistent fashion. (In fairness, the agents of private capital are often as irrational in their demands as those who appropriate public financing.)
Economic aces--and, bluntly, maybe even a few economic deuces--might be able to spot some weaknesses and even a few outright errors in the above formulations. I welcome any such criticism in the Armchair Economists thread. I cannot be as assertive as usual because my total grasp of the underlying theory is not as thorough as it usually is when I take stances on issues.
