When I bring up this topic, I refer to a very abstract form of Capitalism, divorced from implementation, governmental, and social structures. The key features of my model are these:
- It implements the basic functionality of an economy, in other words, it provides a mechanism to transfer goods and services.
- It provides a stable medium of exchange, in modern implementation, money.
- The primary insurance that the economy continues to function is a profit motive. One must actively engage in the transfer of goods and services in order to participate in the economy. One who does not participate finds oneself soon unable to participate (ignoring governmental structures like Unemployment, Disability, Welfare, etc)
- A fall out of that is the occurance of competition.
That's the core definition. In my mind, that's "pure" capitalism. But I don't advocate pure capitalism. I advocate an economy derived from that core, but extending and enhancing the functionality. It makes a good starting point for several reasons:
- The decentralized nature makes for a robust system that discourages the growth of choke-points, and promotes economic exchange. The health of any economy can be measured in transactional-currency-per-minute.
- The profit motive makes it viral. A capitalist economy can continue even when a sizeable portion of society rejects its princples. It is nearly impossible to overthrow a capitalist economy, and becaure of the decentralization, it also becomes incredibly difficult to destabilize.
- Competition provides a form of draw-evolution. As existing niches in the ecology appear, they are rapidly filled, creating a pressure to open up new niches. This avoids stasis as well as a technological/social monoculture that is vulnerable to attack.
That's why I support the core concepts of Capitalism, but Capitalism has some fatal flaws, not the least of which is a nasty positive feedback loop that puts a cap on the effective duration of any capitalist economy yet implemented. The more money you have, the easier it is to earn money. In an effective Capitalism 2.0, this feedback loop is one of the main flaws to be addressed.
Another flaw in current implementations is the poor level of encapsulation. For superior security, the Society, the Economy, and the Government must be carefully seperated so that no one element can have undue sway over another. They must be capable of interfacing in set ways in order to create a series of controlling feedback loops, as the Society checks the Government's power, and vice versa.
There is also an incredible lack of internal security, which, over the years, has been incautiously addressed by Government intervention, with things like anti-trust laws. While these interventions served their purpose at the time, they fail to meet the needs of a changing economy. Any new Economic structures must be developed with resiliance against known exploits, as well as an awareness that new exploits will be discovered, and as such, it must have an easy method of patching these vulnerabilities in a clean, scalable fashion.
Finally, the organic methods that have created the current Government/Society/Economy system have the negative effect of entrenching these systems, making them very difficult to upgrade. Any advancements made must be done with an understanding that any system developed is temporary, and must provide upgrade functionality. Better encapsulation should help with that, as it will prevent functions of any one of the three components from being dependant upon the implementation of another. Ideally, I should be able to run a nation using any combination of Governmental, Social, and Economic structures, seamlessly replacing my form of governance without impacting the functioning of the economy, and vice versa.