What Went Wrong With Capitalism

What went wrong with capitalism? Ruchir Sharma’s explanation is unlike any you have heard before. Progressives are partly right when they mock modern capitalism as “socialism for the rich,” but what really happened in recent decades is that government in developed nations expanded in just about every measurable dimension, from spending and regulation to the sheer scale of its rescues each time the economy wobbled. The result, Sharma says, is “socialized risk,” expensive government guarantees, for everyone―welfare for the poor, entitlements for the middle class, and bailouts for the rich.


Voters say they are disillusioned with capitalism, but a system so distorted by government interventions is a dysfunctional version of free market ideals. As a result, productivity and economic growth have slowed sharply, shrinking the pie for everyone and stoking popular anger. Since these flaws developed as the government expanded, building an even bigger state will only double down on what’s gone wrong. The answer Sharma offers is a series of seven fixes to restore the balance between state support and free markets and lay the path to a more prosperous and happier future.

Ruchir Sharma is a global investor and a writer. He is currently a contributing opinion writer with The New York Times. His most recent book, The Rise and Fall of Nations: Forces of Change in the Post-Crisis World, was released in June 2016 and instantly became a New York Times bestseller. His 2012 book, Breakout Nations: In Pursuit of the Next Economic Miracles, debuted as the Number One bestseller in India, and earned Sharma the Tata Literature Live! First Book Award for 2012. Breakout Nations also made it to the Wall Street Journal hardcover business bestseller list, and was chosen by Foreign Policy as one of its '21 Books to Read in 2012'.