I think you're hitting the nail on the head in some ways, although I'd disagree with you in other ways. The problem is the "regulatory capture" part, not the "

I think you're hitting the nail on the head in some ways, although I'd disagree with you in other ways. The problem is the "regulatory capture" part, not the "capitalism" part, in my view. What we have now is capitalism + rules that serve a small percent. To me capitalism versus socialism are kind of red herrings. The real issue is creating and nurturing competition, which is kind of orthogonal to those issues. It's completely predictable to end up with "crony socialism" just as much as "crony capitalism". The way I see it, the appropriate goal is increasing and maintaining competition. Sometimes this means government protection of human capital pools through welfare and social programs, sometimes this means actually regulating a market to increase competition (net neutrality), sometimes this means introducing government services to compete with private services, sometimes this means privatizing things, sometimes it means deregulating... I also think fairness is another big problem; nominal value and actual value (of labor, goods, etc.) are often different. So in either system you will end up with individuals (you can call them free-riders or psychopaths or whatever) who will take advantage of loopholes, errors, biases, and misspecifications in the system for their own gain. E.g., to me the fundamental problem with income inequality isn't that there's variation in income, it's my sense that that income variation is unfair, in the sense that some people's contributions are being undervalued, or others' are being overvalued, or that there are unrecognized benefits from public services (e.g., net neutrality vis-a-vis ISP's right-of-way grants, government bailouts of financial firms), etc. that aren't being fairly compensated or recognized in regulation. I worry a bit that framing the debate as capitalism versus socialism only perpetuates problems. The problem is really corruption and fairness. If an industry is benefiting unfairly from regulatory capture (e.g., in the form of patents, or physician groups, or whatever), focusing on capitalism versus socialism per se only allows the beneficiaries of that capture to come back with accusations of "liberal communism", and then no one is talking about the capture or the corruption, which is the actual problem, and then it continues.