Robert Coe
Your "barest definition" of capitalism is too bare. Capitalism relies on the creation of corporate entities that can act as though they were individuals or groups of individuals, while insulating their owners from much of the financial liability that individuals would have to assume. In effect, the people strike a bargain with a corporation's owners, based on the assumption (the hope, really) that in the long run the societal benefit (in economic activity, jobs created, etc.) will be worth the risk.

There are two major problems with the way capitalism is practiced today (at least in the U.S. and probably elsewhere):

- Governments are far too reluctant to pull the plug on corporations that no longer serve the public interest well enough to justify their existence. Sometimes a corporation behaves so egregiously that the government that issued its corporate charter should simply cancel it and revert the corporation to a proprietorship or an unlimited partnership. The company's stock price would probably fall to near (or even below) zero, but the owners would have had it coming. And the threat of such an action would be a powerful motivator to promote good corporate citizenship.

- Corporations, at least in the U.S., have routinely (and almost always successfully) promoted, almost as a constitutional right, the notion that governments have no business competing with the private sector, even in cases where the latter are behaving in a monopolistic manner and screwing the public. But in fact the U.S. Constitution favors no economic system over any other. Even socialism or communism would be constitutional, though I'm not advocating either system. What I am suggesting is that public-sector corporations should be created to compete with the private sector whenever the latter exhibits a self-interested indifference to the public good. And where is it written that even good corporations should be insulated from any form of public ownership? Corporations aren't reluctant to seek public "bailouts", willingly trading bonds or ownership stakes to get them. But when things turn good, they howl if the Government wants to keep its stake long enough to make a profit on the public's investment.

Enough ranting. It's not that I'm an actual economist or anything. :^)

Bob