Hi Chris, thanks for the feedback, I have a few thoughts on what you’re saying here.
Firstly, it’s hard to talk about capitalism vs market socialism (or some hybrid of the two) without making a lot of assumptions, based on the capitalist-dominated system we currently live with.
For instance, “Where will the capital come from?” If unpacked, this concern comes with the unspoken assumption that “all things being equal, where will it come from?” But, all things need not necessarily be equal. In a market socialist system, the financial system would change and adapt, and there are multiple ways that capital could be created and distributed, other than the factor market casino through which it is predominantly managed now.
For instance, it could be distributed at the point of creation by government, without the element of debt which is currently attached to it through the federal reserve system. Rather than choosing who to loan to at interest, financial institutions could simply choose who to give grants to. Also, each cooperative business could simply have a capital fund where they put a share of the net profits before it’s distributed to employees, which functions essentially as a company savings for just such expenses.
The more meta and significant question here, however, should be not where the capital will come from, but why we think that shots of capital are so necessary, in the first place. This has to do with our capitalist myth of perpetual growth, which is also connected to how our money is created and distributed, namely, as debt. If money were distributed without debt, or at least without interest, it would be less necessary to achieve rapid rates of growth.
The endless growth mythology is also created by the capitalist system, in itself. Why must a company grow rapidly? Its not to serve their market, nor even to compete with other companies, but mostly for the sake of increasing returns for shareholders.
This is metaphorically like a slave owner cracking the whip to extract as much profit from his labor as he can, compared to a regular farmer, simply working as much is as necessary to support him and his family, still perhaps purchasing new land occasionally (growing), but not to the extent that the slave-owning plantation farmer does. The slave owner is only able to grow because of exploitation, and even if its not outright slavery anymore, exploitation is still the engine of most rapid growth, often by exploiting cheap labor in foreign lands, which might as well be slavery.
So, I guess the short answer to your question is that aspects of the financial system, currency creation and distribution, and underlying economic assumptions would have to change. However, I think those changes would ultimately be good things.