Free markets are a great way to run an economy, just as free elections are a great way to run a political system and ordered liberty a great way to run a society. These three things are key to a better life, even to economic growth. They are our great hope for saving the planet.
That said, capitalism by itself sucks. As an –ism, rather than just a way of structuring the economy, capitalism has a fatal flaw.
Capitalism has yet to figure out what to do when the game ends. And the game is always ending.
Think about it. Capitalism means competition. There are winners, and there are losers. Over time there are more and more losers, fewer and fewer winners. That’s how games work. Adam Smith wrote that capitalists would be inclined toward the common good, and some are. But others are not. “Rich man want to be king, and a king ain’t satisfied until he rules everything,” as Bruce Springsteen sang in “Badlands.”