Again you fail to understand history. I am not an anarchist at all. I believe in government I just believe the role of government is to protect the liberty of its people not to regulate business and peoples lives. The system you describe ie. socialism or something similar is closer to feudalism then capitalism. To say otherwise is complete ignorance to the meaning of the words.
Lets define the two words. Socialism means in my mind state ownership of business and land. Some argue that the state is the people therefore the people have more freedom (thats more of a social democracy) but that is not true because you always will need some party to govern the state and in socialism that party has a lot of power over the economy and your life. In a social democracy which many European nations now fall into you have a medium between the two. You allow people to vote for the leaders while at the same time allowing the party to control the state thus business and your life. It can vary to extremes like fascism or communism. Fascism is complete state ownership, communism is very similar when conducted on a large scale. Lets look at the extremes the early soviet union and nazi germany. Both very brutal regimes, socialist regimes.
Now capitalism basically means in my mind free market. Basically people can do business anyway they like as long as it does not violate the laws of the land, which in a society with a government like the one I envision (as did the founding fathers of the United States) the laws are meant to protect liberty. Like obviously you can't just dump toxic waste into your neighbors land because then you are violating that persons rights. You are harming another person and thus violating his or her liberty and should be persecuted by the government. If a law doesn't exist you have a group of elected officials who are supposed to listen to the will of the people and they make a law within the framework of the constitution of that particular nation.
So do you agree with the definitions?
So now if you have a central bank which is basically a forced government monopoly on banking you do not have a free market. If you allow fractional reserve banking you basically legalized the ability of banks to commit fraud and thus interfered with the natural state of things. If you subsidize industries on a large scale you do not have a free market. Therefore the U.S. and most Europoean and most developing nations do not have free markets. So you cannot say that the system we have today is a result of the capitalist free market because we do not have that system.
Now do you want to talk about war? Do you want to know why we have wars on the massive scale we see today and have this century? Because of centralized banking and fiat currency. Basically if a country wants to go to war they need money to pay for it. So you have two options. You tax people which is usually very unpopular especially if the war is unpopular. Or you print money out of nothing via your central bank mechanism. Now this fake funny fiat money will later cause inflation which will hurt the poor and middle class but that's not the immediate concern the immediate concern is war and how its going to make the banks lots of money. World war I and world war II were both funded by this mechanism! So your socialist way of doing things provides a perfect mechanism for governments to start wars without having to immediately tax its people.
Now do you want to talk about the economic crisis? When you print funny money out of thin air as it done by any nation with a central bank you create an unnatural situation. You create a bubble by creating an environment that encourages unsound investment. If there's lots of funny free money people invest it in all kinds of stupid things. Like selling houses to people who can't afford them. Then when those people can't pay for their houses the banks lose lots of money or so you think! But since we are living in more socialist leaning countries they decide to bail the banks out again with more funny fake fiat money (which later will cost the poor and middle classes their wealth via inflation). In a true free market capitalist system this would not happen. The banks and those stupid investors would lose and the person who tries to take their place will not repeat the same mistakes. But if you continuously interfere with the market and bail out bad business that's not a free market.
Now you want to talk about the environment? In a true free market goods are regulated by supply and demand. If a resource runs low it becomes expensive. Now lets take oil as an example. Why do you think oil is cheap in the United states? Because the oil industry is subsidized! Again the government is creating an un-natural situation! If the law of supply and demand were in place as oil got more rare and thus more expensive other competing sources of energy would begin to be invested in without any need for the government to get involved. Now lets take timber as an example. Lets say you are a timber farmer and own a plot of land. You can do two things. Cut down your whole forest sell it and make some money. Or you can cut half it down and replant it and when the other half grows back cut down the other half. Therefore you can generate a continuous source of money. Because if you cut down all your trees you can't grow more and the supply goes down so you raise prices but the guy who owns the land next store has a constant supply so his prices stay low and he wins.
So basically capitalism and the free market has its own mechanisms the laws of supply and demand to control itself and this is only screwed up when governments get involved in the market as they are and have in the past. Its the governements and banks who are allowed by the governments to commit essentially fraud on a large scale that creates the unnatural situations and booms and busts and ability to fund wars and destruction of our environment (by subsidizing away the law of supply and demand). In other words its state control over business and the land that is the source of our problems. Not the natural situation a true free market would create.
