Capitalism - on the ropes?

This blog is about "intellectual capitalism." But the economic notion of capitalism is certainly at the roots of much of my writing. So where does this word come from?

The term ‘Capitalism’ has a long history. Adam Smith, thought of as the ‘father of capitalism,’ was the first modern proponent of a comprehensive philosophy defending an entire package of basic principles related to individual liberty as an indispensable ingredient to a moral, prosperous, and free society.

Today the term ‘Capitalism’ is used imprecisely-- many suggest that the term ‘Capitalism’ and ‘Capitalist,’ was first derived in English from a translation of the pejorative term used by Karl Marx to describe the class of men he called the elite “bourgeois” society who owned and controlled “society’s capital resources.” With much in etymology, word origins can be multiple and imprecise. The Oxford English Dictionary credits William Thackeray for the first published use of the word ‘capitalism’ in his novel, The Newcomes, although the word seems to refer to finance capital, rather than a discrete system.

Even if Marx didn't invented the term "capitalist," he was hip to the need to label those who control the life blood of economies, oft referred to as "M1" in the broad macroeconomic sense. Right now, there is a massive transfer of capital from labor to management. According to the Congressional Budget Office, between 1979 and 2007 incomes of the top 1% of Americans grew by an average of 275%. In 2007 the richest 1% of the American population owned 34.6% of the country's total wealth, and the next 19% owned 50.5%. Thus, the top 20% of Americans owned 85% of the country's wealth and the bottom 80% of the population owned 15%.

We have a hoarding of capital by banks. This impacts the opportunities for 'labor' (non-management) to enjoy prosperity. In fact, Banks actually create money when they lend it: Most of a bank's loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a when you deposit a check from any other source, the bank holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process over and over.

Are these side-effects of the global economic crisis, or just an extension of what has been going on for 130 years?
We see governments funneling social spending away from big pension firms, organizations that might have realized institutionalization of the collective needs, if they had not been pillaged by the likes of Bain Capital.

Is private property is increasingly frustrating capitalism, by putting the brakes on spending/investment?
Wholesale buy-out of bad mortgages, while being a massive give-away, would end the arterial blockage in the flow of capital.