23 Things They Don't Tell You About Capitalism

We often hear that the economy thrives best when the government steps out of the way and lets supply and demand operate without constraints. The book's central thesis deconstructs this premise: there is no such thing as a totally deregulated market anywhere. Every farmers' market, store, or stock exchange operates backed by prior rules that define who may trade, which goods are permitted, and what limits must be respected.

Think about child labor. In the nineteenth century, when British factories were barred from employing children for grueling shifts, industrialists accused the state of violating freedom of contract. Today, nobody considers that ban abusive. We have simply grown used to the moral boundary drawn by legislation.

In everyday public life, we see the exact same clash in debates over the minimum wage, gig-economy regulation, or health and safety inspections. Those who defend the free market rarely want an absence of rules; most of the time, they just want to keep the rules that favor their own profits. Every market is the result of prior political choices.

For decades, business schools taught that a company's sole sacred obligation is to enrich its shareholders. The claim was that by pleasing the owners of capital, all of society would automatically benefit. The book warns that this race for quick quarterly returns has turned major corporations into instruments of speculation, sacrificing the future of production.

Investors on exchanges like Wall Street rarely put down roots in companies. If quarterly profits disappoint, they move their money in seconds on their phones. Under this pressure, executives spend fortunes on stock buybacks to artificially inflate share prices and pocket astronomical bonuses, instead of investing in technology, new labs, or better wages.

This short-termism corrodes manufacturing health. Modern industry depends on years of patient research and team development to generate real innovation. When a company's cash is drained to pay instant dividends, its capacity to innovate is lost, and the bill for the crisis invariably falls on the laid-off worker on the factory floor.

Traditional economic theory claims that in open markets, each person earns strictly according to their individual productivity. From this perspective, if a bus driver in Stockholm earns ten times more than a driver in a developing metropolis, the Swede must be ten times more competent or hardworking. In daily practice, this assumption makes no sense.

A driver in a developing country navigates heavy traffic, packed buses, and potholed streets with enormous skill. The wage gap does not stem from individual merit, but from strict immigration controls, which prevent the global movement of workers, and from the socioeconomic environment in which each person operates.

Those who work in wealthy nations are surrounded by modern industries, cutting-edge technology, and extensive infrastructure in the real economy. Individual pay is leveraged by the collective productivity accumulated by the entire society. Ignoring this ecosystem and blaming low wages in emerging countries solely on personal incompetence is a major distortion.