Social Capitalism

Use profits to help care for the general welfare, through programs sponsored by government.

   Economics is the study of what we do with what we've got. It is not an exact science, but examines how people in a society use what's available to them, and how that evolves over time.
   Modern economic study began with Adam Smith, and was extended by David Ricardo. Karl Marx applied the Hegelian dialectic to explain how it was evolving, and would inevitably lead to socialism. A major error, however, was in assuming that its evolution would then stop, since a socialistic society would be the best of all possible worlds, and full government/labor control would keep society safe. In the 20th Century, the theories of John Maynard Keynes dominated, which encouraged temporary government intervention to prevent or resolve catastrophe. Many, however, contest Keynesian economics and maintain that the government that governs best governs least.
   
   So economics is a social science. There are too many variables, especially human variables, for it to qualify as an exact science in the way that physics or chemistry are exact sciences. People do not always act or react in the same way to any given stimulus or set of circumstances. There are, of course, general trends, but there are no guarantees. We are all, at one time or another, outliers.

   In the 1970s, the study of economics was hijacked by the number-crunchers who tried to make it a "pure" science, like mathematics, chemistry or physics. But people and their behaviors cannot be reduced to strict patterns that follow the laws and principles of logic. We are, all of us, free spirits who on occasion indulge in group behavior patters or are swept up in the madness of crowds. At the least, we follow cultural maxims of what constitutes "acceptable" behavior -- most of the time. But we are free to deviate from these norms and pay whatever consequences there may be.
  In short, economics was and will remain a social science. The best we can to is describe the patterns of what people actually do, without attempting to reduce these patterns to immutable laws -- prescriptions of what people should and must do. That way madness lies.

   Economic predictions can sometimes be helpful, so long as we keep in mind the heroic assumption of ceteris paribus -- other things equal. That is, assuming nothing else changes, and remains the same, such and so will most likely happen. But because there are so many variables, other things seldom remain the same for long. Statistics can infer a probability, but that is at most a calculated guess, again assuming no change in any of the many variables.
   People, however, demand predictions, so economists supply them -- with cautions, much as weather forecasters do. Unfortunately, many people ignore the cautions.

   Classical economics claims that a free market, left alone, solves all conflicts and reaches an equilibrium of supply and demand. The Great Depression proved that was not enough. Some government was essential.
   Many conservatives, however, still maintain that the classical economic doctrine of a free market balance is best in the long run, allowing enough time for all the variables to adjust to changes. 
  As David Ricardo put it, in the long run, the economic body heals itself. However, "In the long run, we are all dead," as Keynes responded.
   Even so, the economic body grows and changes. Adam Smith described the economic body. Karl Marx noted that capitalism has within itself the "seeds of its own destruction," which would lead inevitably to socialism. Later, economist Joseph Schumpeter described the "creative destruction" aspect of capitalism, which meant that as an economic body grows and creates new material, it destroys the old.

   As in so many things, however, a greater truth is to found somewhere between the two extremes of totally free capitalism and fully controlled socialism. Let's call it social capitalism, where the efforts of the many are combined with the talents of the few -- or the talents of the many join the efforts of the few -- for the welfare of all.
   And that goal may call for a coordinator -- government -- to sponsor and administer the programs needed for the common weal.