A thoughtful article, but just a few corrections: capitalism and free markets are not inextricably intertwined. You can have free markets in an agrarian society that lacks capital for investment and you can certainly have capitalism without free markets, as in the USA today. Capitalism is simply the application of capital to create additional productivity. So for example a weaver using a hand-loom could invest her savings in a water-powered loom and increase her productivity. That’s capitalism in a nutshell.

As Adam Smith pointed out, any system that permits certain individuals or organizations to accrete power will result in those individuals exploiting everyone else. That’s why Soviet Communism failed and it’s why the US economy has failed. You can have failure in free markets just as easily as you can have failure in command economies. Smith knew this, which is why he was very clear that the role of government is to stop such accretions of power. Unfortunately the USA with its pay-to-play system ensures that politicians must sell themselves to the highest bidders in order to get elected and re-elected. It’s an approach 100% guaranteed to result in corruption and dysfunction. It’s why European countries don’t permit campaign contributions (the state funds every candidate with precisely the same small amount of money to spend).

Because US citizens tend to be unaware of history and of what’s happening elsewhere in the world, mistaken conflations arise that result in incorrect analysis of the problem and consequently incorrect “solutions” being proposed. Anyone wanting to understand why the USA is the case study in how not to do things should read Smith’s The Wealth of Nations, Popper’s The Open Society and Its Enemies, Hayek’s The Constitution of Liberty, Marx’s Capital (which is hilariously wrong about everything and therefore highly instructive) and pretty much anything by Mancur Olsen who was uniformly excellent on the inherent problems of achieving equity in any form of economic system.

Anyone who enjoys my articles here on Medium may be interested in my books Why Democracy Failed and The Praying Ape, both available from Amazon.

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