This question exhibits a grave misunderstanding of the causal principles of human excellence. And why we must define and implement a new operating system for humanity.
The mere question of whether capitalism or government intervention is better, and exhibits a fundamental misunderstanding of the stark reality of capitalism as we know it. Capitalism has required quite a bit of government intervention if one paid attention to the news about failing auto companies, failing banks, and the abuse of customers by all major banks. Damaging societal excesses abound.
The point I am making is that no matter what system one aims to deploy, the public and private sector must be in a state of equilibrium, by which the plurality of personal interests is balanced with societal interest.
In a proper deployment of a system of capitalism, one based on evolving relativity of freedom (we do not have today), the merit of the marketplace will mostly be guarded by the private sector. In more socialist and communist systems, the balance of personal interest and public interest is mainly guarded by the public sector.
The reason why all marketplaces, regardless of what you prefer to name the social constructs that embody them, require government oversight, intervention, and controls, is that the same kind of participants plus its bad actors exist in all. Bad actors who in pursuit of a vile-maxim of selfish interests would not think twice about destroying societal interests on their path to “glory.”
So, a game of soccer requires predefined rules and a referee for intervention and enforcement. Even when the soccer players may not need schooling or arbitrage to play the game, one cannot, however, no matter what (economic) game you intend to play, let a few bad actors destroy the trust and confidence others have put in, and expect out of the game.
Ergo, the performance of the participants – not the preference of the kind of arbitrage you personally fancy – determines what economic construct is best suited to maintain the trust and integrity in the marketplace systems we build.
And so far, neither the private sector nor the public sector, individually or collectively, have defined or established the operating principles that can and will make society trust either. A reason why we need to take a hard look at the way we build operating systems for humanity.
