I think there are a couple of problems with the "rising tide floats all boats" argument.

> My only metric is is it getting better on average for me and other people

This might be true for you, but may not be for all. Research suggests that on the whole people value relative wealth more than absolute wealth [1] making inequality an important predictor for social stability, a prerequisite for a capitalist system based on property rights.

> I hope capatilism lasts another couple of hundred years and everyone gets to level 3 or 4

As other comments have pointed out, it looks as though an economic system predicated on permanent growth - or even a particular rate of growth - might have some limits. It seems like it's not sustainable with our current level of technology.

[1] http://science.sciencemag.org/content/318/5854/1305.full?ijk...