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Competition breeds innovation. Capitalism inevitably kills competition. Fortunately, your parents aren't capitalists.
Competition kills competition. To the victor go the spoils. Bigger war chest, bigger army. Etc.
The reason I defend capitalism is not because I like the outcome. I just have good reason to be extremely skeptical of the alternatives (judging by history). Systems that don’t take into account people’s natural competitive instincts are doomed to catastrophe.
For anyone who hates hierarchies and dreams of a flat system (some form of anarchism), I would invite them to read The Tyranny of Structurelessness by feminist Jo Freeman.
From the article:
Evenly distributed power is a lack of hierarchy, isn't it? How does that article support your point that a flat system doesn't work?