One of the overwhelmingly false notions that has been promoted in American society is that a person is either a believer in capitalism, socialism, or Communism. The assertion is that those are the sole choices available to us throughout the world. There are actually numerous variants of economic distribution systems, but reductionism seems to be an irresistible human tendency. As well, the tacit presumption among most is that we Buddhists are more or less all de facto socialists and Communists. I am a Buddhist, but I also believe that properly regulated capitalism is the most logical economic distribution system for the way that humans tend to behave in the real world.
The sad reality is that, to date, there has yet to be an actual functioning capitalist system on the planet. There are perverse versions of capitalist economies in existence, but none of them appear to function in a logically "capitalist" manner. In the United States there are many who claim to believe in capitalism, but act to support oligopoly, religious oligarchy, and sadly, fascism. There are people who claim that they support socialism, but the version of socialism that they offer is the rhetorical nonsense that countries the like Soviet Union and the People's Republic of China were primarily based on. Both countries ended up collapsing under the weight of horrible corruption and militarism, with China currently being no more "socialist" or "Communist" than is the United States.
What has happened is that, in light of numerous treatises on various interpretations of Capitalist ideals, people have come to accept a simple idea that capitalism equals greed and unchecked Hedonism. The pathetic irony is that a truly Capitalist system must recognize the general interests of all people in the system to be sustainable over time. When the most vulnerable members of society are unable to participate in the process, you really no longer have true capitalism. The misunderstanding arises from the mistaken notion that economic distribution systems are little more than forms of gaming. That basic misunderstanding is a moral failing that seems to even elude most economists. An economic distribution system exists not to serve the pleasures or diversions of distinct groups of individuals, but to serve the needs of society as a whole. Any other understanding of economic distribution is a perversion of reality; one that is based on the delusional assumption that there is something that can be "won" in such systems. That notion speaks to a basic moral failing of all members of our society, collectively. It is not even close to being rational.
Capitalism can serve the best interests of most people in the world, if it is tempered by rational and carefully crafted regulations. While people must be allowed to benefit from their labors in proportion to its benefit to those who employ them, we can never assume that we have a full meritocracy. Regulations can serve to help eliminate corruption, but human biases, mental and societal illnesses, and other flaws of humanity prevent us from ever truly operating in a completely fair manner. The odd notion that many have about capitalist systems is that they think that they should be able to buy the right to create the rules of operation. That is not capitalism. Without reasonable regulations to prevent small groups from advantaging themselves at the expense of the entire system, we can quickly fall into oligopoly, or even fascism.
From a Buddhist perspective, this is simple acceptance of what is. Socialism sounds nice in theory, but as it is played out in the world it has been less than successful. Even the European nations that many consider "socialist" are actually capitalist nations, just with many social programs. This makes a lot of sense, but is largely misunderstood. The average American has little notion of what true socialism is, outside of the jingoistic nonsense fed to them by Leftist holdovers from the glory days of the Soviet Union, or ill informed imps like Rush Limbaugh or anyone at Fox News, among many others. The theory is quite beautiful, but human nature seems to send most attempts at socialism into the symbolic gutter. If we had a world filled with healthy, well educated, and rational human beings, it might be possible. In the United States, we have large scale political arguments over whether or not our president is pretending to love skeet shooting for political gain. In that light, socialist theory seems a bit of a reach for most of our citizens.
The idea of some form of incentive for outstanding performance and innovation is what makes capitalism work. Whether that plays out in a fair or fully rational manner is pretty much understood through our current world situation, and from historical examples. Capitalism is subject to many perversions. It is difficult to implement in a logical and effective manner, if we assume that it is something other than gaming. If we assume that it exists to support the functioning of a society over an indefinite period of time, then it must be continually adjusted, and redesigned to prevent abuse, increase efficiency, and to serve the needs of all in the society. That is not socialism, by the way. Capitalism allows for economic distribution based on incentive, innovation, and targeted labor. When people introduce their irrational notions that it is the same as Hedonism, then they have failed to understand the workings of the system. Hedonism is not sustainable. Capitalism must be sustainable to be effective. Otherwise, the system will eventually collapse, and everyone will suffer the consequences. Even so, with all the potential pitfalls, capitalism respects human frailties better than most other economic systems.
Most people need incentives to motivate them to achieve. Capitalism recognizes that, and can offer rewards in a manner that is compassionate, reasonable, and close to fair. That is important to myself as a Buddhist. And, while the reality of any economic distribution system is some level of inherent corruption, true capitalist states can do a better job at self policing because there are always people who wish to garner economic success, and they tend to not like those that engage in corrupt behaviors to gain advantage. The United States is not "capitalist" in any fashion. And please note, I am not advocating "laissez faire" capitalism here. That is fantasy. Without formal regulations, people will "cheat," and "cheat without limit." The pretense of "honorable people" controlling the processes processes of economic distribution is not something that anyone should assume as possible. Most people have the potential to scoundrels, regardless of their upbringing, social status, or religion. Humans are humans.
Compassionate action in a capitalist state requires the creation of social structures to maintain some level of stability and safety. Public health interests alone suggest that any large state should have a Universal Healthcare system of some sort. Hybrid systems like the German system of public and private components ensure that everyone has access to healthcare, so it is easier to prevent horrible plagues and large scale health issues that impact everyone. An economic safety net also makes sense outside of the obvious moral reasons. People lost to the system do not purchase goods or services. They do not provide labor. Reasonable social and economic safety nets can not only prevent people from feeling total economic ruin, they can be designed to assist individuals in finding evolving ways to integrate into the economy, thereby bringing further cash flow. And education should not be a for profit endeavor. Some things are basic to economic mobility. Education is one of them. Education should be extremely low cost or free. Without it, innovation suffers, and economic mobility, which is essential to capitalism, is impossible.
In summary, there is no reason why capitalism cannot be supported in a manner in line with the most basic of Buddhist beliefs. The primary reason I believe in capitalism, put in the most basic terms, is that it recognizes human weaknesses and frailties, yet still provides opportunities for compassionate function. People cannot and will not be forced to act in mindful or compassionate ways. Those are choices, and while we need to have laws and rules in place to prevent hideous injustices, we cannot force anyone to be mindful or compassionate if that is not in their hearts to do. Peace and compassion to all.