Hybrid economy for me please

I promised Dead Men that if I had time I would write about capitalism, and since Gidget Commando gave me the best damn quotable quote on capitalism since Marx, here's your post. In other words- you demand, I supply.

I believe in hybrids. I believe that there are some things government should never be responsible for, and some things that business should never be responsible for. And I think there is a good way to figure out which one should be responsible for what. If the ultimate goal of profit is at odds with the welfare of society, then business should stay the fuck out of it. This is why military contracting is bad- it incentivizes war. Military contractors make money when we are at war, they have a vested interest in starting and perpetuating wars. Health insurance companies have a vested interest in supplying as little care as possible. This is how they make money. It is not a flaw, it is the system.

As for things government shouldn't be involved with, I don't want some dude in a cheap blue suit deciding what this year's hot fashions will be, or what movies should get made, or which books will be published. Governments are notoriously bad at responding to market forces. Look at the current health care debate for an example. A huge percentage (I think it's in the 70s) of people want a public option, but that's not what we are going to get. The government is not responding to the demand.

Now here's where the overlap is (and where Gidget Commando comes in.) Capitalism is, at it's root, single minded, unconcerned, and amoral. It's not evil. It's not suddenly come down with some terrible disease. It always has and will always be looking for ways to cut costs either in labor or environmental concerns or product safety, because that is how it is designed.

Government's job is to keep capitalism in check because as Gidget Commando says:

It's like a perpetual adolescent. Capable of great energy, innovation, movement--but y'all really wouldn't want to leave it to its own unchaperoned devices, lest it throw a kegger and destroy the entire house.

Capitalism will skip class, get high, shoplift lipstick, and forget to use condoms. Government is there to be the parent with restrictions that keep capitalism from reckless driving into a bus full of us regular folks. Even Adam Smith knew this (but you'd be hard pressed to find a libertarian who will admit to it). Smith urged suspicious attention be paid to any proposed new law or regulation that comes from business, because they "have generally an interest to deceive and even to oppress the public." Or the teenage capitalism will promise to stay home alone while you're gone for the weekend and then throw that kegger. It can't help it. It's a teenager.

So I am fine with capitalism, as long as it's tightly regulated and on it's best behavior with clear consequences for every miss-step, and only if we have a strong social welfare system and capitalism is kept out of issues of national or global welfare.