I think we can look at this differently; the problem isn't necessarily capitalism; it's that we don't live in a society that follows classically ideal capitalist dynamics anymore.
In a healthy capitalist system, you'd have enough competition to make this less of an issue. But healthy competition has been obliterated by our (politically condoned) race for short-term gains through economies of scale, and by the development of incorporation (hundreds of years ago by now, yet the conflicts with other social constructs like freedom of speech and capitalism have never really been addressed).
Any exact number is of course by definition flawed, but it's hard to imagine a stable capitalist system existing without much more vigorous competition - any firm with enough market share to significantly influence standards or think more about retaining users (i.e. lock-in) than about the competition is a problem; and much of our economy is made up of firms like that. At which size does that happen? Anything exceeding 1% market share?
Without sufficient variation and choice, the underlying dynamics (of capitalism) just don't work. In essence, we don't live in a classical capitalism with market forces converging on efficient solutions; but rather in an business or political world where barriers to entry and network effects form moats around inflexible fiefdoms in our society.
This isn't a problem that's easy to solve, because economies of scale work, and even if society at large would benefit from more dynamism, self-interest pulls individuals into corporations that are large enough to undermine competition. Furthermore, the rules we've invented surrounding incorporation strongly encourage this behavior, because it's a way to limit personal risk, and because a conceptual organization can choose to be many formal organizations, it's a way to for corporations to avoid bearing the costs of risks more generally than individuals can. Additionally, basic things like trademarks, patents and copyrights work in favor of centralization - and while I'm sure there are alternatives to those concepts, they're really deeply embedded in society, support well-connected vested interest with strong lobbies, have broad popular support, and in any case have a useful purpose too - replacing such concepts is essentially a non-starter, even if it would be beneficial in the long run.
So at best we can hope for reforms to increase resilience - those would be useful not just in catastrophic situations, but also to increase the effectiveness of capitalism in general. Reforms should limit the kind of exclusive control intellectual property offers (such that it's less suitable as a weapon to knock out competitors, and more suitable to earn income from those you cannot control yet use your innovations). We should have much stricter antitrust regulations, with fewer exceptions allowing large sizes (i.e. the default assumption should be that significant market share is harmful, and place the burden of proof the other way around to the way it is now) and smaller size limits before rules kick in. And we should reevalute the kind of protections corporations benefit from that do make sense for individuals; and perhaps to what extent incorporation can be used to shield owners from risks to encourage subsidiary-jungles less (or simply have a small tax on incorporation itself, much like individuals pay income tax - but on overall value, not profit, such that it's costly to have tons of layers of incorporation).
> I think we can look at this differently; the problem isn't necessarily capitalism; it's that we don't live in a society that follows classically ideal capitalist dynamics anymore.
When was that time supposed to be? In my years of studying history as a hobby, I've never encountered this mystical utopia of "true" free-market capitalism. In fact, as far as I know the ideology itself is mostly a product of the 20th century.
Oh definitely. We've never lived in an ideal anything ;-). Yet much of the assumptions about how capitalism will allocate resources efficiently rest on exactly the kind of properties we don't follow and are following increasingly poorly over the past decades. (Oh, I see I used the word "anymore" above. Well, that doesn't make sense, indeed).
As to the ideology: I blame the cold war for that; that shifted the debate firmly towards capitalism as an article of national identity, and the "more" the better (whatever that even means). To this day it's still common to hear the response that any criticism of capitalism is akin to communism - i.e. we're still identifying ourselves with this myth, even though communism (to the extent that that mystical utopia ever existed) has been defeated. And once something is a form of patriotic self-affirmation, it's too much to expect any kind of pragmatic, reasonable tuning to take place in politics (not that that's happening in politics currently regardless of topic, but I think that's a different matter).
I thought it was already obvious that extant economic systems necessitate hybridization.
Capitalism needs social and communal optimization and policy in order to not completely collapse, i.e. currently bailouts, but this can also be accomplished with effective policy and law. Communism needs capital wealth and free-market trading to not collapse into a material deficit.
In a healthy capitalist system, you'd have enough competition to make this less of an issue. But healthy competition has been obliterated by our (politically condoned) race for short-term gains through economies of scale, and by the development of incorporation (hundreds of years ago by now, yet the conflicts with other social constructs like freedom of speech and capitalism have never really been addressed).
Any exact number is of course by definition flawed, but it's hard to imagine a stable capitalist system existing without much more vigorous competition - any firm with enough market share to significantly influence standards or think more about retaining users (i.e. lock-in) than about the competition is a problem; and much of our economy is made up of firms like that. At which size does that happen? Anything exceeding 1% market share?
Without sufficient variation and choice, the underlying dynamics (of capitalism) just don't work. In essence, we don't live in a classical capitalism with market forces converging on efficient solutions; but rather in an business or political world where barriers to entry and network effects form moats around inflexible fiefdoms in our society.
This isn't a problem that's easy to solve, because economies of scale work, and even if society at large would benefit from more dynamism, self-interest pulls individuals into corporations that are large enough to undermine competition. Furthermore, the rules we've invented surrounding incorporation strongly encourage this behavior, because it's a way to limit personal risk, and because a conceptual organization can choose to be many formal organizations, it's a way to for corporations to avoid bearing the costs of risks more generally than individuals can. Additionally, basic things like trademarks, patents and copyrights work in favor of centralization - and while I'm sure there are alternatives to those concepts, they're really deeply embedded in society, support well-connected vested interest with strong lobbies, have broad popular support, and in any case have a useful purpose too - replacing such concepts is essentially a non-starter, even if it would be beneficial in the long run.
So at best we can hope for reforms to increase resilience - those would be useful not just in catastrophic situations, but also to increase the effectiveness of capitalism in general. Reforms should limit the kind of exclusive control intellectual property offers (such that it's less suitable as a weapon to knock out competitors, and more suitable to earn income from those you cannot control yet use your innovations). We should have much stricter antitrust regulations, with fewer exceptions allowing large sizes (i.e. the default assumption should be that significant market share is harmful, and place the burden of proof the other way around to the way it is now) and smaller size limits before rules kick in. And we should reevalute the kind of protections corporations benefit from that do make sense for individuals; and perhaps to what extent incorporation can be used to shield owners from risks to encourage subsidiary-jungles less (or simply have a small tax on incorporation itself, much like individuals pay income tax - but on overall value, not profit, such that it's costly to have tons of layers of incorporation).