In fact, capitalism is the system of rights, liberty, civility, peace and non-sacrificial prosperity; it’s not the system of government that unjustly favors capitalists at others’ expense. It provides a level legal playing field plus officials who serve us as low-profile referees (not arbitrary rule-makers or score-changers). To be sure, capitalism also entails inequality – of ambition, talent, income, or wealth – because that’s how individuals (and firms) really are; they’re unique, not clones or inter-changeable parts, as the egalitarians claim. Capitalism is the political system which ensures that innocent “economic power” (i.e., the power to produce) isn’t mixed with force to become invalid political power (i.e., the power to loot); it’s the system that separates business and state, for the same good reason that it also makes sure to separate church and state. Neither of the two recent political movements – “Occupy Wall Street” or the “Tea Party” – seem to fully grasp this.
Yes, there’s an alternative system that does entail the government unjustly ruling business and government, in turn, improperly controlled by business for business’s exclusive benefit (whether by subsidies, special favors, monopolies and franchises, tax breaks, or bailouts), even as it nominally still permits private property holdings: it’s called “corporatism” (sometimes, synonymously, “cronyism” or “fascism”). Corporatism was the system originated almost a century ago by the American “Progressives,” and later by Mussolini in Italy, Hitler in Germany, and Roosevelt in the U.S. (see his 1933 National Recovery Act, struck down by the Supreme Court in 1935 as unconstitutional because it was so corporatist). Corporatism goes hand-in-hand with statism, with abandonment of the fully free economy and adoption of the welfare-warfare state. Yet while many oppose cronyism, corporate welfare, and bailouts, they also endorse handouts to almost everyone else, including to the politically-valuable cronies so easily found among today’s labor union leaders, “green” companies, under-water homeowners, over-indebted college students, and war-happy munitions makers.