We see no reason to mitigate the instability of free markets. That’s what makes them so much fun! But when The Financial Times undertakes to encourage its readers to fix capitalism, you realize how few real friends that disagreeable creed must have. — Bill Bonner, The Daily Reckoning, November 1, 2011

It just doesn’t get any respect:

Few people really like capitalism — even people who call themselves capitalists. The feds could probably round them all up and gun them down in an afternoon. Capitalism is too chancy … too unpredictable … and too uncontrollable. No wonder so few people are fond of it; capitalism is a poor friend. It is disloyal. It is mischievous and willful. It is hard to get along with.

Capitalism offers is no sure route to success. You can be smart, work hard, and go to the best schools. There is still no guarantee that you will succeed.

Nor, once you’ve succeeded, is there any sure way to maintain your wealth, power and status. Wealth has no fidelity, neither to any one person, group, or family. It goes where it wants. It is fickle and unreliable.

Nor does it go necessarily to the strongest, fastest, or smartest. As it says of the race in Ecclesiastes, time and chance play a big role. Neither can be made to stay put. Once you have made a lot of money, the same wheel of fortune that brought it to you can take it away from you. It never stops turning.

And so capitalism scares a lot of people: the poor because wealth eludes them, the rich even more so because they very likely will lose their money unless they can get some one — normally government, through bribery and favoritism — to “help” them to hold on to it:

The rich tend to be even bigger anti-capitalists than the poor. As soon as they get some wealth they try to put the brakes on. They set up tests and hurdles … designed to keep the hoi polloi off their tennis courts and out of their businesses. They use every means possible to separate themselves from the masses . . . The rich are not above using the tax code either. In pre-revolutionary France, for example, the aristocracy and the clergy were exempt from taxes. Even today, most taxes are taxes on getting rich, not on being rich. Governments tax income, not wealth. France is an exception with a wealth tax. But it is a relatively modest one — never exceeding 2% of assets. Compare that to the top marginal rate on income. Combined with social charges, it rises to more than 71%.

Through a sort of “negative feedback” effect, everybody ends up hating capitalism:

If [a certain group is] poor, they implore the government to ‘tax the rich’ and give the money to the poor. If they are rich, they want the government to protect their wealth and status — with every means available to them. Democratic governments generally do both. They support the poor with loud attacks on the rich combined with whimpers of money (for the poor can generally be bought — vote for vote — much cheaper than the rich). As for the rich, their support is more subtle and underhanded. There are tax credits and loopholes for anyone who can afford them; sugar-laden contracts for the insiders and plenty of jobs for well-credentialized blowhards.

The rich complain about the poor. The poor complain about the rich. Both complain about the government. And everybody hates capitalism.

But over time, the giveaways, bribes, regulations, intercessions and meddling on the part of the government have a big effect on the economy. The more the government interferes with market signals and market-based capital allocation, the less able the economy is to produce real wealth. More and more resources are purloined by the insiders before the truck reaches its destination. Paperwork, lawyers, administration, regulation, taxes take a toll. So does misallocation of capital investment to huge, unproductive industries such as education, health, and defense. There is also a shift of wealth generally from those who earn it to those to whom it is redistributed … and from capital formation to consumption. And gradually the economy becomes paralyzed and parasitic … and nearly everyone gets poorer. And often, the state … and the mobs that support it … become desperate for more money. Then … the rich had better watch out!

Bonner also discusses his General Theory of Zombieism and how the health care industry has been zombiefied here.