No More than Double: Can a Single Rule Tame Capitalism?

Capitalism's defining feature--profit maximization without limits--drives instability, inequality, and environmental degradation. Traditional policies such as taxation and regulation have failed to curb this dynamic because they do not alter firms' core incentives. This paper proposes a simple yet structural solution: a "maximum allowed profitability" (MAP) rule that caps a firm's return on equity at twice the median ROE of its peers. Profits exceeding this threshold would be fully taxed, creating a hard limit on excessive profit-seeking and reducing systemic risk. Using ORBIS data for major European economies (2002-2021), we show that profitability distribution is stable, making MAP feasible and easy to implement. Unlike conventional fiscal or monetary tools, MAP directly addresses the prisoner's dilemma inherent in capitalism, fostering a more balanced economic system. While global coordination is essential, MAP could complement initiatives like the OECD global minimum tax, reshaping incentives toward sustainable growth.