Even if you accept that "values which promote innovation, productivity and genius" should take priority over all other considerations, it's simply false that completely laissez-faire capitalism is a system that embraces those values. In a system where short-term profit is rewarded over any other concern, then individual corporations can just as easily get ahead by some combination of

a) stifling and/or buying out competition,
b) manipulating consumers to convince them that they need ever more of a product
c) passing the costs of environmental damage on to others, including future generations
d) paying workers ever lower wages

as they can by innovating and improving productivity. So if your main goal is innovation and improving productiviy, you need laws in place to prevent alternative methods of increasing profit. Funnily enough, that's more or less exactly the system we have, after learning the lesson the hard way innumerable times. We don't have the regulations and government oversight we do now "just in case" - it's there because corporations have repeatedly demonstrated their inability to self-regulate adequately.

And FWIW, I don't see captains of industry running away from Sweden and Norway in droves, given their oppressive taxation and incessant government interference.

"wizofaus" leaves out the biggest rort of all, which is:

(e) acquiring an essential and irreplaceable asset and waiting for its price to go up.

This practice is purely exploitative, and not at all innovative or productive or ingenious. Yet "the system we have" not only does nothing to prevent it, but positively encourages it by giving it preferential tax treatment. Hence we have too many people looking for unearned windfalls, and not enough people creating wealth and jobs.

Good posts from most participants here - I heartily agree with everything put forward by grputland, wizofaus and Ludwig.

For too long, the economic debate has been framed in terms of competing ideologies - regrettably, market regulation has been painted in terms of a socialist outcome, which is to be regretted. Now, in Australia, the US and Britain, mainstream party politicians are wary of any policies that could be construed as market regulation, as they know the market fundamentalists will scream 'socialist' from the top of their lungs.
Just have a look at how Costello tried to smear Rudd as a Christian Socialist, and how quick Rudd responded by placing himself firmly in an economically conservative camp.

This argument shouldn't be about economic conservatism or socialism, it should be about the best system possible.

What's more, there has not been a persuasive case made for an extreme free market approach. The foremost free market economy, the US, has shown that while it does generate huge profit, that profit isn't used to benefit society as a whole.
It doesn't necessarily award the most innovative or the hardest workers - it tends to reward the most exploitative, as well as the large players who have more influence.

As another poster pointed out, industry isn't running from Scandinavia - in fact, when I observe the scandinavian economies and the average income of their citizenry, compared to the leading economically conservative market, the US, which has the added benefit of being the most powerful and all the leverage that implies.

There was an excellent OLO article on this, which rebuts this perception that laissez-faire economic systems are superior.

http://www.onlineopinion.com.au/view.asp?article=4744

Oops - a few typos in that post. Should have finished that second last paragraph "When I observe the scandinavian economies.... all the leverage that implies, I see little basis for adopting policies in line with this extreme free market approach.

I also shouldn't have used regrettably twice in that early paragraph.

Alas, t'would appear that I'm a pedant.

I agree entirely with your remarks that pure capitalism is hardly desirable.

On my blog I said as much, but was only able to provide a truncated version for this forum.

"Good posts from most participants here - I heartily agree with everything put forward by grputland, wizofaus and Ludwig."

Now you've really gone and hurt my feelings, TRTL!