No, this isn't a well-functioning capitalist system. Competition is a core principle of capitalism. What occurred in the aerospace industry represents a government-sanctioned monopoly.
It’s always so funny to read this kind of answer when someone points out the evident flaws of capitalism!
“Hey, wait a minute, this is not how capitalism is supposed to work, so you can’t say it’s capitalism”.
Too bad that capitalism isn’t one monolithic thing and this is ABSOLUTELY how loosely regulated American capitalism works.
It’s a form of capitalism where human life is an optimization problem that sits on the way to profits.
Is there any kind of alternative that could be found, or have we reached the end of history, with our only two options being 2023 capitalism versus 1960s Soviet state capitalism?
I'm less concerned about mistakes as I am about systemic failures and bad incentives.
Boeing seems to have created a political and regulatory environment for itself where its better for it to design and build planes poorly, than it is for it to design and build planes well.
Consider the incentives of the people at the FAA. Their incentive is to never approve a design, because if they approve a faulty design, they get the heat, too. It's much safer to just not approve anything, or at least delay demanding ever more documentation.
Hence there's always going to be a tug of war between the FAA and the industry. The FAA never wants to approve anything, and industry goes out of business if the FAA doesn't approve it.
You'll see the same forces in action with the FDA.
BTW, as is abundantly clear from history, a fatal design mistake can and has destroyed several airframe companies. Boeing's finances were punished severely after the MAX crashes. Boeing does not win by making an unsafe design. When I worked at Boeing, I didn't know any engineer who was willing to sign his name to a faulty design. Yes, the engineer responsible for a piece of work gets his name on the drawings. It's career suicide for him if he signed off on a bad design.
Capitalism is literally defined by the ability to invest capital to accumulate more of it by way of profit. The logical end of this process is straightforwardly monopoly.
And if the world/environment/context of the business didn’t change then the monopolies might last, but because there is change there is room to innovate and outcompete the monopolies.
Capitalism is not only defined by the accumulation of capital, but also by competition. The interplay between market forces, competition, innovation, and regulation in capitalism works against the formation of monopolies.
The aerospace industry is not a good example of capitalism. What we have with Boeing is basically a government sanctioned monopoly. It’s basically a weak form of nationalization, without the stigma.
>Capitalism is not only defined by the accumulation of capital, but also by competition
That's wrong. In reality, the mere theoretical potential for competition has always been more than enough to call it capitalism from any perspective. The facts are that actual competition is not a requirement.
Capitalism is simple: The capital rules supreme. As opposed to the previous system of aristocracy, where it was the land owners. Nobody would seriously claim that aristocracy requires any kind of competition between the aristocrats. Even the very first capitalist big enterprises, such as East India Company were created as _monopolies_
Monopolies are broken by capitalism just as much as they're created by capitalism. The whole "end-stage capitalism" schtick is wrong because a free market will lead to the ossification and then breakdown of a monopolist. You just have to finish spring semester of Econ101 to find out how.
In it's origins it was about the capital ruling, as opposed to the aristocracy. So political power would be in the hands of people with capital, not the landed aristocracy. The means of production only entered the equation with the industrial revolution. And capitalism is older than that, albeit not much older
