"...capitalism is predicated on bad behavior." Did "Capitalism" cause this?:
Or this?:
Or this?:
No. Socialism did. Not a "perversion" of socialism or a "misapplication" of socialism.
Socialism kills. First it kills the human spirit, and then it kills people.
Capitalism is predicated on freedom, human rights, sound money, voluntary exchange of value and a limited government which derives its authority from the people.
The economic system that exists today in most Western nations is a type of state socialism or corporatism in which people are made to claim their rights from the government, including the right to own and exchange capital.
It’s capitalism, just now the government has control of more of the capital. Some significant sectors of the financial industry make money by figuring out how to attract government "bail-outs". The looser politicians are with bail-out funds, the more such finds will be "needed".
To understand why, consider the following "game": Player wagers $100 at 1:1 odds that the first card in a newly-shuffled deck will be a 10 or higher. It should not take a math genius to realize that the house vig in this game is pretty huge: out of 13 plays, the player will win 5 and lose 8; the vig is thus 22%, and the game is clearly unattractive to anyone seeking to make money.
Suppose, however, that the government offered to reimburse people who played the game 50% of anything they lost on each hand. Every 13 plays, the player would stand to win 5 and lose 4 (net +1), while the house would stand to win 8 and lose 5 (net +3). The game would thus be win-win for both the house and the player. The only loser would be the taxpayers (who would be the real source of all the money won by both the players and the house).
While there are many people on Wall Street who generate wealth by causing resources to be distributed more efficiently than they otherwise would, there are many who produce wealth for themselves by placing bets that in real terms should have a negative net expectation, but which include an unstated "side bet" that the bettor will be able to fleece someone else (likely the taxpayers) if they lose on the primary bet. Such behavior is antithetical to real capitalism, since it deliberately mis-allocates resources so as to maximize the bettor's ability to harvest bail-out cash.