Failure is a feature of capitalism. It is to be expected.
However, what shouldn't really happen is a cluster of failures. That's caused by misinformation in the pricing system. Real saving rate doesn't matched up with interest rate, so people are being fooled by non-existent capitals.
Absolutely. Clusters of failures are just popping bubbles built on incorrect information.
Everyone knows that everyone is after more money, it's a prime motivation. This makes it easy to manipulate if you can make a credible looking "investment".
As Marx correctly understood, capitalism is best likened to a force of nature: it doesn't have any moral basis and can have both morally positive and negative consequences. This is why we need governments to keep capitalism in check: unchecked capitalism also leads to activities we find morally unacceptable. Like evolution favors only those traits that add reproductive value, capitalism favors only those activities that increase capital. This may mean obtaining a monopoly, deceiving customers and competitors, employing slaves and generally any other activity we disapprove. In a fully rational market, the customers would not accepts those practices, but as Keynes said: the market can stay irrational longer than you can stay solvent. Moreover, capitalist principles cause an important part of the customers not to care about the immoral consequences: they don't see them because the market isn't transparent or because they do not want to see them. We therefore cannot trust the market to merely expose the positive sides of capitalism. Failures, even clusters of failures, are to be expected and can only be avoided by government intervention. As long as a government lauds the free market and has the irrational expectation that the market will straighten itself, we will continue to suffer the consequences of unchecked capitalism.
Wow, it's hard to know where to begin with this post. It seems strange to me that you're trying to use Marx to justify a liberal position. After all, Marx would be the first to disagree with you about the feasibility of using the state to check the market. Marx saw the state as little more than the 'executive committee' of the bourgeoisie, so using the state to check the market is just not going to happen until revolution leads us out of the capitalist stage of history.
Your equation of evolution and capitalism has a nasty heritage of Social Darwinist thinking. I think it's a misunderstanding of both evolution and of capitalism. Better not to make such an analogy.
Monopolies, deception, fraud, slaves, and so on are not at all unique to capitalism and have been with humanity throughout history. There's no compelling reason to believe that capitalism favors these practices for rational or irrational reasons.
It's not clear why the government is the only institution in society that can avoid failure. It's moreover not clear that the government doesn't play a role in setting up failures as a consequence of its intervention. Marx (or Lenin at the least) would certainly hold that it's the state that creates the very phenomena like monopolies that you decry as "irrational."
My intention is not to use Marx to justify anything; I just want to lay focus on something he and Engels got exactly right and which is being forgotten: capitalism is amoral (a term that is not be confused with immoral). As a result of this, parts of their analysis are extremely valuable and it's a damn shame the anti-communist tendencies have swept that under the rug.
By stating that evolution is an amoral process, I completely condemn any form of Social Darwinism: you cannot derive moral values from amoral principles. Evolution is completely amoral: that which reproduces itself, will continue to exist in some form, independent of our moral judgment about it. Social Darwinists are therefore guilty of the naturalistic fallacy
However, the same goes for capitalism: that which increases capital the most stays in the best position to keep increasing capital. Because of irrationality and a lack of market transparency, the best moral intentions on the part of individual humans cannot prevent immoral consequences from arising. I'm not saying any of those immoral consequences are unique to capitalism. I am saying they are unavoidable when you let capitalism go unchecked.
It's not clear why the government is the only institution in society that can avoid failure
And I cannot prove it is. However, as far as I can see, no other institution has the power nor the mandate to guide capitalist forces. This is the exact reason you have things like the Federal Trade Commission and an Antitrust Division in the DoJ, both on a government level. Who else could do that job?
If the government is trying to head off failures, then it become a quasi-political game. Politics also happens to be a far more violent affair than the play-wars of businesses.
To be threatened with a gun for the purpose of forceful extraction of your wealth is FAR DIFFERENT than peaceful voluntary exchanges championed by capitalists.
Also you misunderstood failures(as in loss). Failures is a feature of capitalism. Failure play an improtant part of resource allocation by telling companies what not to allocate to.
Likewise, success(as in profit) tell companies that this is what consumers want. It could be that consumers want lot of trashy poor quality mass produced goods or high quality expensive goods. The market help companies decide what to produce.
However, what shouldn't really happen is a cluster of failures. That's caused by misinformation in the pricing system. Real saving rate doesn't matched up with interest rate, so people are being fooled by non-existent capitals.
At least that's how I understand it.