Capitalism's fatal flaw is its ultimate building block--greed. The goal of Capitalism is for the Capitalist to make as much money as possible. Capitalism goal is not to create meaningful employment for people, nor is it to educate or care for the sick. Capitalism purpose is to serve Capital. The very concept of a "Free Market," demands that individuals be free to set up whatever arrangement are best to produce wealth.
Capitalism inherently pits individual interest versus the national interest. The individual wants to make as much money as possible which causes tensions with large parts of society. What else would explain the existence of the minimum wage. If there was no minimum wage, wages would drop all across the country, as businesses moved to maximize profits.
Look at our many product safety regulations, seat belts as an example. Car manufacturers fought seat belts tooth and nail because they felt it hurt profits (well they phrased it as the additional costs having a negative effect on the consumer). Think of the various food safety regulations, building codes, and inspections. These are all things put in place to temper greed.
Financial regulations work the same way, to temper greed and protect the public. Why does the FDIC and other bank regulators exist? Because we (the non capitalists) cannot leave the capitalist to their own devices--at least not completely.
No doubt there will be new financial regulation in the wake of the worldwide
recession (depression?). But I just know the big law firms are waiting for the new legislation with bated breath, waiting to find ways around it and inform their clients. The next financial catastrophe is really a matter of time. Greed will win again.
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You are the first person besides myself that I have ever heard put it exactly like this. I always say that when I was a child in school they would teach us about why all systems besides ours in the US failed. It just seemed logical to me that our system would have to have a flaw as well. I asked our instructors but was not given any answer that made sense. I had to figure it out for myself later as many of us have recently. Greed is the fatal flaw of this system. Regulation is one answer and I think a shift in values is another antidote to greed. When is enough enough? We may need to look at ourselves and make that determination.
When we teach companies, individuals, and whole nations that maximizing profits is the end goal, then the concerns of society, individuals or even the environment come secondary, if it's there at all.
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