What Went Wrong With Capitalism

What went wrong with capitalism is a question that economist Ruchir Sharma approaches with a fresh perspective. While progressives often criticize today’s capitalism as “socialism for the rich,” Sharma argues that the real issue is the significant growth of government influence across developed nations. This influence ranges from increased spending and regulation to large-scale economic interventions whenever markets show instability. Consequently, Sharma describes the situation as “socialized risk,” where government guarantees create a safety net for all societal strata—welfare for the poor, entitlements for the middle class, and financial bailouts for the wealthy. This distorted version of capitalism, heavily influenced by government involvement, has left voters feeling disenchanted, as it fails to reflect true free-market principles. This has led to a decline in productivity and economic growth, reducing overall wealth and causing widespread frustration. As these problems arose alongside the expansion of government, increasing the government's role further is unlikely to resolve these issues. Sharma proposes a set of seven solutions aimed at rebalancing the relationship between governmental support and free markets to secure a future of enhanced prosperity and wellbeing.