Saying we don't know what would happen under laissez-faire capitalism is like saying we don't what would happen under full-blown communism. For Platonic reasons, no system ever works out perfectly according to the theory. Communist systems degenerate into dictatorships, and capitalist ones degenerate into plutocracies. We know the mechanisms at play, even if democracies aren't dumb enough to let the libertarians have their field day for long.

I've written more on the underlying social dynamics (on dominance hierarchies, psychopathy, corruption by power, the law of oligarchy) than on the problems with capitalism, so your strawman can be dismissed. Of course gross economic inequality isn't solely a capitalistic phenomenon. Never did I say any such thing. The disgrace, though, is that capitalism was supposed to be modern and humanistic, yet by harnessing our primitive ambitions, capitalism reverted to premodern social norms. That's why true liberals/modernists/humanists become progressives or socialists, and fake ones call themselves "libertarians" or "classic liberals"

I have no idea what kind of economic system would be better than capitalism. The question is moot, though, as Yanis Varoufakis points out, because capitalism has already evolved into neo-feudalism.