We will do better to look at "oligopolies".
Capitalism is, simply the right of private ownership. Describing the recession as a crisis in capitalism is an oversimplification that has no chance of ferreting out the fundamental causes.
Capitalism cannot be classified as "doomed" as a response to the '07 recession simple because it is capitalism that has led to a standard of living that has increased by 25% in thirty years.
Individuals work to procure housing, to purchase food, to raise children, to sustain life. And in the process of working, people strive to improve their standard of living.
A large percentage of 160+ million working individuals strive to find opportunities to increase their standard of living, through educational and business opportunities.
Capitalism allows individual to accumulate wealth and to improve their standard of living. In doing so, they improve the overall standard of living for society at large.
The term "Corporatism", a generic term which simply identifies the formation of people into groups for a common cause, has been adopted to identify the formation of national and global ologopolies with political influence.
It seems senseless to use "corporatism" when a more descriptive term, oligopoly, is already available.
The term oligopoly is well defined and includes precise models of how oligopolies form and perform in an economy. Oligopolies are similar in nature to monopolies with the difference of the market being dominated by more than one private company.
Oligopolies form out of economic circumstances similar to monopolies which enjoy economies of scale and barriers to entry. An additional benefit occurs when the product is one of necessity.
While classical theory would suggest that competition between companies drives prices downward, classical theory is dependent on there being a statistically large number of companies and consumers in the market place such that cooperation becomes impossible.
When there are few companies, monopolistic behavior will form out of simple learned behavior. Without knowledge of why, as the companies strive to increase profit, they will naturally find a balance that maximizes that profit. If profit can be had by restricting output, then output will be restricted. If profit can be had by maintaining high price levels, then prices will be held high.
Corporate organizations is a natural outcome of cooperation, whether it be within a framework of capitalism or otherwise. Capitalism itself, when it exists within the framework of a classical market is nothing less then beneficial.
Market control by oligopolies is distinctly different. It is a secondary and natural outcome of two of the best economic processes for advancement and growth, corporatism and capitalism. But corporatism and capitalism are not the problem.
Whether the product is energy, health care, or financial services, the results are the same. Within the framework of capitalism and corporatism, certain products lend themselves well to these two devices. As we strive for efficiency, costs are reduced. And with some products, scale alone provides enormous efficiencies.
It is noted, in a comment, this very effect of improved efficiency that has moved even service oriented companies into the realm of efficiencies of scale. "As services are now being automated, jobs are simply disappearing and not being replaced. There is no fourth category." Indeed, with the creation of automated checkout systems at large grocery chains, fewer workers are needed as checkers.
But, again, it is not capitalism or corporatism that is at issue here, it is increasing efficiencies, especially efficiencies that create economies of scale. The very existence of these economies of scale, which rely on a large investment in capital equipment, create barriers to entry. No small market can compete with the pricing available by a large grocery chain able to sell volume at pennies of profit.
Oil refining is a continuous process of production. The same equipment will generate billions of barrels of production for little more fixed cost then it takes to produce millions. With the advent of information processing advances, both health care insurance and banking are able to serve a million more customers with no substantial increase in costs per unit.
Every market that can be identified, as falling under this heading of "bad corporatism", is identifiable as a market dominated by oligopolies. Basic game theory in a basic micro economics course tells us, and these companies, exactly how to act to maximize profit.
There is little disagreement on the details, barriers to entry, economies of scale, every improving efficiency, and political influence. The first three describe monopolies and oligopolies.
There is no doubt that the issue is specifically global and national oligopolies, not capitalism or corporations in general.
Still, this is an age old argument and concern. With every recession that follows an increase efficiency, the same old complaint arises, the loss of jobs to modernization, (and imports). This is the argument your grandfather had and his grandfather's grandfather. The question is, why is this one any different?
