- Capitalism only works for the relentless and the lucky. Who are the most successful people? (a) The ones who are lucky enough to have a rich dad and (b) the ones who are able to modify the rules or abuse the rules or just break the rules according to their own needs. Why is a blithering idiot like Donald Trump allowed to be such a successful person? Simply because he had a rich dad. If he had to build his empire from the ground up he would be in the gutter. He had just the luck to be born in the right family. Then on the other hand you have companies who just sue every competitor out of existence, who pay lobby groups to influence politics, spend huge amounts of money to get their favorite presidential candidate elected and get some legislature in return, plain old bribery, just as long as it generates profit and it doesn't affect them negatively. It's not just Volkswagen.
This is bad because it leaves a lot of potential unused (the ones who are not lucky) and because it favors destructive behaviour. In a rational society everybody would get the chance to contribute. In a pure capitalistic society, only the ones who are lucky enough to afford education will be able to make something useful of their life. If you want to get maximum potential out of your society you need to make sure everybody is able to start on equal footing.
- The invisible hand gently looks away when profit can be made at the cost of others, the system or the environment. A company's #1 priority is to make profit. If it can do that by allowing another company to make profit as well then good (this is the principle behind the invisible hand). But it will not hesitate to make more profit by damaging others. The examples are countless. Who are the most successful companies? The ones who manage to circumvent the system by having lots of semi-legal offshore structures so they can avoid paying taxes at all. If a company thinks it will make more profit by murder and knows it will get away with it, it will do so without hesitation. You think I'm exaggerating? Just look at what Shell did in Nigeria, or what deforestation companies are doing in the Amazon. Depending on your definition of murder, you could include factory workers in Bangladesh or mining workers in China. The point I'm trying to make here is, if it wasn't the clothing company's number one priority to make profit, the factories in Bangladesh could have been of much higher quality and then none of those people needed to die.
It doesn't need to be that extreme of course: the environment is everybody's favorite subject to make profit on. Sure, the environmental costs will accumulate but it will only be felt within 50 years and what does that matter if we can make more profit now? With capitalism in place, there will never ever be a way to stop the climate change. Companies are literally destroying the world we're living in for no other reason than profit. In any reasonable and logical society, companies should have stopped using fossile fuels as soon as became apparent greenhouse gasses were going to become a huge problem.