Thus it was that in 1776, the year that Jefferson wrote the Declaration of Independence, so many of the acts of tyranny that King George III was accused of had as their objective the implementation of British mercantilism in the colonies. The American Revolution was at least partly a capitalist, or anti-mercantilist revolution. In the same year that the Declaration of Independence was written Adam Smith published his famous treatise, An Inquiry into the Nature and Causes of the Wealth of Nations. The "Wealth of Nations" is a prolonged attack on the policy of British mercantilism and a defense of its opposite: free trade and the institutions of capitalism (even though the term "capitalism" had not yet been coined).
The argument more and more individuals are making, at its core, is the same argument former Fed Chairman Alan Greenspan made at one of the recent Congressional hearings. He spoke of the mistake he had made in trusting and believing in free markets. Paraphrasing, he said that his former world-view, that free markets work, was in error, and that now he admitted this error. The only problem with his admission, and the mainstream media's superficial diagnosis, is there haven't been any truly free markets in existence for the better part of a century! Free markets have become increasingly an extinct species since the early 20th century, and since then have increasingly gone down the path towards "disaster" capitalism: the kind of capitalism in which virtual monopolies run rampant under the guise of an interconnected and indecipherable web of subsidiary companies and power and wealth consolidation ad infinitum.
It's not that capitalism doesn't work. If it were real, as in laissez-faire capitalism, where elected representatives honorably performed their duty and ensured markets remained free, it would work. What we have in the U.S. and increasingly all over the world is what Buckminster Fuller called the Grunch of Giants, or to put it colloquially, corporatocracy or corporatism. Large multinational corporations now control our governments and major institutions. And they didn't come into being because of capitalism, but rather through the absence of free-market capitalism parading as capitalism.
Many believe that capitalism results in inevitable wealth and power consolidation. This is not where capitalism takes us. This is where "disaster" capitalism takes us. True capitalism, à la laissez-faire capitalism, takes us in a very different direction. Wealth and power consolidation is not possible under laissez-faire capitalism, as the free market by its very nature would correct for this through greater competition, thereby spreading the wealth and power. Consolidation of wealth and power occurs only when the free market is inhibited in some way. That is, when capitalism is not functioning.
The problem is that many large companies that have lost the spirit of innovation and entrepreneurship have instead tried to change the rules of the playing field in lieu of competing. And when corporations succeed in changing the rules of the playing field, we are no longer operating in a free market system: true capitalism is no more. In our time, capitalism has been replaced with something that is 'capitalism' in name only.
