Under the title, Why isn’t capitalism working?, Summers promotes the idea that the current problems in the economy are the result of "capitalism".
The spread of stagnation and abnormal unemployment from Japan to the rest of the industrialized world does raise doubts about capitalism’s efficacy as a promoter of employment and rising living standards for a broad middle class. This problem is genuine.Say what? The current problems are not the problems of free markets, but occur at precisely the areas where government gets involved. Minimum wage laws and unemployment insurance are the only way long-term unemployment can occur. The slowdown in the standard of living (decline?) is the result of government regulations protecting elitist firms, at the expense of upstarts and other competitors that would advance innovative products and new ways of doing things.
...along with dramatic rises in the share of income going to the top 1 and even the top .01 per cent of the population and declining social mobility do raise serious questions about the fairness of capitalism. The problem is real and profound and seems very unlikely to correct itself untended. Unlike cyclical concerns there is no obvious solution at hand.Again, this is the direct result of regulations benefiting the elitists, at the expense of others.
And it sure can create itself "untended". Just quit making it regulatory difficult for new firms. The elitists use their access to get around the many regulations that make it difficult for most to operate.
Summers is discussing a problem caused by central power gaining an edge, not free market capitalism.
Next, Summers states that there are areas where capitalism performs weaker:
The difficulty is that in many of these areas the traditional case for market capitalism is weaker. It is surely not an accident that in almost every society the production of health care and education is much more involved with the public sector than the production of manufactured goods.This clearly shows that Summers has no understanding of the capitalist system. There is no reason why healthcare and education can not be provided by the free market. Indeed, at different times they have. It is only when government has gotten involved that quality has collapsed and prices have skyrocketed.
Bottom line: Summers has created a straw man of what capitalism is. He points to problems created by government intervention and implies that they are caused by capitalism. Remarkably, after building this strawman, he resorts to calling for more government control. No doubt with himself as a key player in wielding the power. The latest rumor is the Summers may be named head of the World Bank, that colossal organization that acts as enforcer for elitist banksters and drives countries into poverty----poverty which Summers will likely claim is the result of "weaknesses" in capitalism.