The prisoner’s dilemma is a thought experiment of game theory wherein two individuals may choose to either “defect” or “cooperate”.  If both cooperate they achieve a small gain.  If both defect they each lose a significant amount.  If one defects while the other cooperates then the defector gains a large amount while the cooperator loses a large amount.

The essential flaw of socialism is that the individuals, especially those responsible for the administration of government, must all act altruistically. Once a number of individuals defect on the prisoner’s dilemma each faces then the “socialist’s utopia” quickly devolves into the horrors of the Soviet Union or Maoist China.  That is to say, bodies stacked on the bonfire of history in the millions, and tens of millions, and hundreds of millions.

Capitalism accounts for and harnesses the drive of the egoistic individuals in society.  The members of society are incentivized to prosper by acting in the interests of each other.  As Ralph Waldo Emerson put it:

“Doing well is the result of doing good.  That’s what Capitalism is all about.“

In a civil capitalistic economy, the weights in the prisoner’s dilemma become inverted and the defecting individual must take a hit to his own interest if he wishes to spite his neighbor.

[Secondary point… parasitic (in the non-derogatory technical sense) nature of administration has the same stabilizing effect in a pluralistically governed capitalistic state as it has in ecosystems. The interim success of a particular segment of the population leads to the prosperity of those who specialize in exploiting that segment. While that exploitation remains a “win-win” game the exploiting “parasites” gain much more relative to their needs than does the successful segment. This provides a competitive disadvantage to them.  Is this a resolution of Peterson’s dilemma of the Pareto distribution of wealth?  Ua Lava Le!]