Item — HN Reader

>what capitalism wants to avoid is putting "money" in with "power"

I'd argue the enormous amount of private money in politics is evidence against this being the case in practice, along with the well-recognised notion that outcomes in the justice system often depend on how much you can afford to spend on legal representation. Yes there's a lot of formal separation between what is public and what is private, but the realpolitik is that (for example) the water company pouring untreated sewage into the rivers has much more power than the people affected by that practice.

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> but the realpolitik is that (for example) the water company pouring untreated sewage into the rivers has much more power than the people affected by that practice

This is true, but it's purely a problem of lack of state oversight and competence. That company isn't capitalism. That company is a group of people making decisions, and not being held accountable by the state. A state-owned water company could be in exactly the same situation.

I think you're doing an admirable job of explaining things, but what you might be missing is that many pro-capitalist/pro-libertarian public figures seem to be constantly trying to undermine the very government oversight and competence that you are saying is the real problem with capitalism. I don't mean to suggest that you are in that camp. I'm just trying to explain why people seem frustrated with the idea that states and companies are distinct entities which should be considered separately when thinking about society. In practice they interdepend on one another and many people with power and money that inhere in private institutions actively try to undermine the state's ability to pursue them.

I think that reality is something we ought to acknowledge, although I'm not sure what to do about it. From my point of view European style socialism (modulo a few things) seems to be the optimal balance, but I'm happy to acknowledge it isn't trivial to predict in practice how anything will pan out.

The "real problem with capitalism" always boils down to:

1. Lack of competition.

2. Lack of information to reliably choose between competitors.

Which are at odds with each other. In order to ensure sufficient information, you need some kind of framework that keeps out any competitors that cannot satisfy the expected information disclosure, which generally ends up narrowing the field to the small few able to tick the right boxes. Thus, you get the tug-o-war between wanting information and wanting competition.

At the political extremes, some believe that competition is most important above all else, at the other it is believed that information is most important above all else. Interestingly, both extremes tend to lead to socialism. "Competition above all else" means that there are no encumberments in seeing co-operatives form. "Information above all else" means that government becomes so intertwined that the public ends up owning the capital. It's the middle ground where we find the "moats" that keep capitalism alive.

Socialism doesn't really change anything, though. At best you are just moving the problem around as the problem isn't actually capitalism at all. You can see the same dynamic play out even when capital isn't involved. It is much more fundamental.