Capitalism has a number of dangerous inherent flaws. It has no way to deal with externalities, leading to unstoppable depletion of natural resources and accumulation of waste (including things like carbon dioxide and even heat). It has no intrinsic mechanism for determining a "fair" division of surplus wealth (i.e. profits) between workers, management and owners, leading to incessant and often violent negotations over wealth sharing. It tends to create monopolies which are at odds with the basic concept of a free market. The actual way in which it functions is highly dependent on the societal and legal framework in which it operates. It probably isn't even possible at all without strong central governments, whereas it rejects the idea of external regulation and claims to be autonomously sufficient. These are not problems that can be resolved by "tweaking" the pure economics of capitalism, they are inherrent. Clearly only a modified form of regulated capitalism has any chance to function effectively in the long term (if that). This is basically the system that came out of world war II, and it worked fairly well until several things happened that may perhaps be linked. First and foremost, right wing ultraconservatives established a long term explicit plan to roll back as much as possible of the New Deal and post-war evolution, including things like high marginal tax rates, estate taxes, capital gains taxes, Social Security, minimum wages, and so on. This is clearly a case of pure class warfare. It is obviously not sustainable in the long term, as an impoverished population can't afford to purchase the products, thus reducing demand and ultimately making the capitalist system itself dysfunctional. Second, there is the component of pure costs of production, which must be presumed to have risen significantly with the end of cheap US oil in the mid 1970s. I remember myself when gasoline was less than 30 cents at the pump, and each penny increase was a newsworth. Nowadays prices in the US are at least 3-4 times that, and are even higher in Europe. Whether as a source material for chemical industry (as in plastics) or as a source of energy, a several fold increase in price must reduce profits if the price index does not rise equivalently. To me it is highly suspicious that the beginning of the triumph of the right wing neocon agenda began shortly after the mid-1970s. It could be coincidental, but could also be that the increase in oil prices and lack of control of those prices translated into greater energy put into subverting our political process. Further support for this idea comes from the relatively recent recovery of the US economy (in terms of GDP if not wages), also coincident with the use of new technologies to increase national oil production thereby reducing dependence on middle -eastern oil (reducing but not eliminating).