Capitalism is barely under discussion at the moment after the collapse of communism. is that right? Are there any better functioning alternatives to capitalism?
Capitalism works. Why?
Adam Smith put it succinctly in his visionary book The Wealth of Nations. The baker and the butcher do not ensure that there is bread and meat on the table every day, not out of charity, but out of profit.
Smith was fiercely attacked by his believing contemporaries and later by Socialists and Communists for his immoral philosophy. However, Smith was proved right in the nineteenth and twentieth centuries and again today. Capitalism is, as far as we know, the most effective method of creating wealth. Capitalism is based on the egoism of man. Everyone wants to get as rich as possible with as little effort as possible. The end result is that everyone will do what they do best. In this way a division of tasks is created. People can focus on a specialty and get rich through trade.
The strength of capitalism is that it does not require central planning with superhuman gifts. A capitalist system works autonomously. The government only needs to set preconditions. Thus, the government can prevent criminals from striking. The government can also protect certain collectively valuable goods, such as public health, clean air and water, with legal preconditions.
Shortcomings of Capitalism
Capitalism is immoral and, in principle, does not spare anything within the boundaries in which it operates. If there is a certain ethical rule (for example, working on Sundays), someone who does not adhere to that rule can earn more. Capitalism also constantly tries to stretch the boundaries within which it operates, for example by bribing politicians or by lobbying to influence politics. Sometimes this is useful, for example if a restriction causes a lot of damage without much use, it is often questionable, especially if restrictions are introduced to benefit one company (or a small group of companies).
There are also people who are hardly or not at all able to work. They will starve unless a good Samaritan helps. Another annoying feature of capitalism is that the income disparities become very large. This provokes jealousy and unrest.
What would a workable alternative to capitalism look like?
Capitalism assumes that people only work or do business in order to become very rich. Obviously, income is the main reason most people work. However, many people, especially the highly productive among them, work for a completely different reason: they enjoy doing their job. Nor is it true that people invent things to make them rich. They get annoyed by something (or have a dream), get a smart idea and work it out.
Inventors like inspiration much more than the perspiration needed to make an invention ready for market. Many inventors even go bankrupt because they work on their invention like madmen. Couldn't such incentives be a good alternative to capitalism?