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Could an almost entirely capitalist country work?

I say "almost" because people are still forced to pay a form of tax, but they don't call it tax - what would normally be government funded services (police, public infrastructure, city beautification, etc) are actually private companies and can get a special license to collect the taxes. So you could have competing police companies, for example. But the payer - while they don't choose the amount they pay from their income - can allocate the funds how they see fit.

Other than that it's a capitalist economy in every way where it's applicable.

The heads of the nation, the "president" type people - the keepers of the constitution - are so ridiculously rich that they are considered unbribeable, and above corruption. But they are, in practical terms, little more than figureheads.

The actual government (like parliament and lower levels) is run by representatives of large companies. This is almost alternative to democracy - it's thought that consumers will "vote with their feet". i.e. stop spending money on the companies that rule badly and so they will lose their place in the government.

Now I'm not asking if this is a good system or even an OK one, it's supposed to be a bit dystopian (for many people anyway). I'm also not asking how "our" (present day) world could become like that.

But is there anything that would make this just undoable?

BTW it's set in "the future" - e.g. flying cars, laser-like weapons, and any advanced technology that can be used to hand-wave limiting-type problems. (e.g. construction being cost-prohibitive, etc.)

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    $\begingroup$ Obligatory reference: memory-alpha.wikia.com/wiki/Rules_of_Acquisition A more serious answer is a question: can capitalism even work in a post-scarcity economy? Currency exists to "fix" the problem of distributing scarce resources and to provide "fair" compensation for effort/work (set in quotes because capitalism has its weaknesses there). But after scarcity ceases to exist, can capitalism even have any kind of relevance?! en.wikipedia.org/wiki/Post-scarcity_economy $\endgroup$ – MichaelK Sep 7 '16 at 10:38
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    $\begingroup$ I didn't say it was a post-scarcity economy. I didn't mean advanced technology would eliminate scarcity, just that it could be used to get around otherwise prohibitive issues. There'd still be plenty of scarcity... $\endgroup$ – colmde Sep 7 '16 at 11:16
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    $\begingroup$ You want Jennifer Government $\endgroup$ – Separatrix Sep 7 '16 at 13:22
  • $\begingroup$ @MichaelKarnerfors While I'm a strong advocate that capitalism is the least evil of the systems for a scarcity economy, I agree fully that it checks out post-scarcity... which is where we're heading. I just hope our civilization can survive the transition without mass starvation and chaos. $\endgroup$ – Nex Terren Sep 7 '16 at 13:47
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    $\begingroup$ To add flavor to this "dystopian" statement, consider that such a society would undoubtedly create many monopolies (preventing these is a primary reason the FTC exists in the USA), and I can't help but think that indentured servitude would also come up. After all, if there is no law against it some people would undoubtedly sell their children in such a world in exchange for luxury goods or service... or sell themselves for their family... or maybe that would be a term of non-payment that less scrupulous companies would put in purchase agreements. $\endgroup$ – GrinningX Sep 7 '16 at 14:41
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What you're describing, if I'm understanding correctly, is either a Night-Watchman State, or a something of an Anarcho-Capitalist society. I have heard arguments for this sort of government, but my concern is that it would create a highly inequitable and unstable society. Can it be done? The answer of course is yes, but it probably wouldn't last long.

To try and contextualise this, understanding the history of capitalism is essential. Modern conservatives in Britain view pre-Socialist Britain as something of a paradise lost, a view encouraged by Margret Thatcher. But it's a gross and erroneous simplification. I will try and keep this brief (and fail).

After the Second World War Britain held a general election in 1945, which was won by the then socialist Labour party. They adopted sweeping reforms, such as universal healthcare, unemployment welfare, free education, slum clearance, nationalisation of industry, etc.

These reforms came about as a result of popular frustration with the status quo, and the realisation that nationalised schemes could work. After all, if "war communism" could defeat Nazi Germany, surely other collectivist systems could work during peace time?

The Liberal Reforms of 1906-1914 were insufficient. They had been passed to tackle social problems endemic within the classical liberal society of the 1800s. New state-led policies were implemented; like a state pension, national insurance (healthcare), and job centres. Before these reforms the elderly, sick, and unemployed had to rely on family and charity, which was often just not enough.

Poverty was endemic in Britain, even by the start of the war in the late 1930s. There were attempts to help, like Victorian Workhouses, but these were often little better than Debtor Prisons. The gross inequality also led to security concerns, for example Anarchist Terrorism in London, and sympathy for communism.

A frequent Anarcho-Capitalist argument is that a stateless system will balance upon competition between insurance companies, working in the interest of the consumer. Insurers contract security firms to enforce law, which will insure peace and stability. But this seems something more like a society run by fancy mafia clans. Even in the contemporary world where the state is a strong institution, corruption, bribery, and dirty tricks are frighteningly common when it comes to big business.

There are historical examples contrary to the notion that corporations will work for the consumer's interest, like the Pheobus Cartel. This was a conspiracy of lightbulb manufacturers between 1924 and 1939, with the largest manufacturers creating a monopoly, and agreeing to both control prices, and creating lightbulbs which would break more often to increase sales.

Without deliberate efforts to mediate between the interests of workers, government, and corporations, inequality will increase and this will lead to poverty, anger, social unrest, and perhaps even revolution. Don't forget, that's what happened as a result of the Great Depression in 1929. Germany in particular was vulnerable at this time, owing to its reliance on American investment.

When the depression happened this dried up, and every single German bank failed. With this the entire system, which had seemed so secure in the roaring twenties, was in peril as the nation was plunged into poverty. There were street battles between communists and fascists, as well as communist and fascist revolutionaries. And we know which ones won - on the premise that liberal capitalist democracy is weak.

NASA has even done a research paper on the collapse of civilisations, putting inequality high on the list of causes. Concerningly, Thomas Piketty's magnum opus; Capital in the Twenty First Century, finds that after an analysis of capitalism from the birth of the industrialisation to present, there's one obvious rule. Private wealth grows faster than the economy, therefor inequality is natural to capitalism. Without efforts to mitigate this by organisations which have an interest in helping the poor, we are led back to the Great Depression and NASA's paper.

So given these things, it seems likely that a "pure" capitalist society would come into being, become very unequal, and then be overthrown by revolutionaries of some description. It could also tear itself apart as rival insurance and security firms compete for turf, and descend into feudal or criminal mentalities. Mexico's drug war for example.

How could this happen? Look at western politics since the end of the Second World War. We're already heading in a classical liberal direction. Lower taxes, lower taxes, lower taxes. Sounds great. But. There's a relevant phrase here: With taxes I buy civilisation. I suspect the problem is a very short collective memory. None of us remember what it was like in 1800 or 1900 or 1928, and so we don't think that it could get like that again. Because we are generally dangerously optimistic.

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This isn't just slightly dystopian. It's really, really dystopian. There are a few things I can see happening:

  • For Profit government/private government. Every single service and amenity is charged for. Use a road, pay a toll, to keep the road intact and to make a profit besides. Call the cops, pay a fee. Certain neighborhoods would collectively make a general fund so that cops would come no matter what. I see that people have already linked the Ferengi rules of acquisition in the comments. If you actually look at the DS9 episodes where they are on Ferenginar, you'll notice that every single service (including, if I recall correctly, the use of the elevator in a government building) involved a fee of some kind.

  • Massive Pollution Profit is the most important thing. In a purely or nearly purely capitalist society, there would not be an EPA. Consider leaded gasoline for instance. The manufacturers knew how dangerous it was, yet, because there was a profit, they produced it for as long as possible before they were brought to heel. Champions of capitalism say that the market self-regulates this sort of thing, and that by harming folk you would lose customers. Yes, eventually, you do lose customers, but in the meantime, you take home a tidy profit. So what if your company tanks or doesn't deliver on its promises or kills some folks--individuals will make $$. This happens now, and has happened in the past. In a purer form of capitalism, you can bet it will happen with far more regularity.

  • Monopolies & Price Fixing This is the end game of Capitalism. There's a reason why we have laws to try and prevent it. We still don't, because with enough money, lobbyists influence those laws.

  • Disadvantaged Workers & Perhaps a revolution Take a look at inappropriateCode's answer.

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  • $\begingroup$ And yet every problem listed here was worse in the very anti-capitalistic Soviet Union. Methinks capitalism is being blamed for activities that represent its antithesis. Again. $\endgroup$ – EvilSnack Sep 11 '16 at 17:57
  • $\begingroup$ @EvilSnack Strangely enough, the extreme of nearly any system ends up in this state. We do not live and have never lived in an entirely Capitalistic society. $\endgroup$ – Erin Thursby Sep 11 '16 at 19:30

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