You could say the same for Wall St. Theoretically, the purpose of financial markets is to "efficiently allocate capital." But there were years during the Bush 2 admin when half the corporate profits in the nation were made on Wall St. That's efficient allocation of capital into their own pockets!
Capitalism assumes good and accurate knowledge of financial conditions and values of the items on the market, and sometimes of the participants as well. In the modern world, few people have that knowledge, so we hire middlemen such as brokers, and we regulate the markets as much as possible.
But others in the markets object vociferously to regulation, refer to it as "government overreach" and "socialism," and then blithely accept bailouts when market conditions are bad.
Really, it's an indictment of unfettered capitalism, a denial of any "magic of the marketplace." I don't have an easy solution; I'm just pointing out that capitalism needs to operate within constraints.
UPDATE Offshoring is another downside of capitalism. Sure, it was great for profits for the early corporations that moved manufacturing offshore. But the ultimate result is the hollowing out of the middle class, and fewer people who can afford the goods made offshore. Good for the bottom line turned out to be awful for the nation.
@ElwoodBlues Perfectly explained the way Wall Street operates, prioritizing profit over efficient capital allocation. The 2008 financial crisis demonstrates the necessity of regulations to maintain order. Of course, most anti-capitalists do not advocate for the abolishment of free markets. Optimal free markets thrive when complemented by regulation and oversight.
No capitalism has not caused the rapid rise of house prices.. Actually lack of capitalism has caused the rise in house prices because capitalism would cause builders to build more houses to take advantage of high house prices and a higher supply of houses would drive down prices..
You can probably find out the real reason for high house prices by looking into Zone restrictions and home density restrictions imposed by local governments.. You can even add to that the flood of Chinese investors from China engaging in capital flight.. Getting their money away from the grips of the Chinese communist party who are leading China into an economic abyss.. These Chinese investors buy houses and leave them standing idle. parking their money in the west as a secure nest egg..
As for real estate agents charging high percentages that's not a sign of capitalism, that's a sign of collusion between real estate agents. And that's anti free enterprise..
