What Went Wrong with Capitalism

“By smothering capitalism’s competitive fire, big government is slowing productivity growth,” according to this unpersuasive treatise. Sharma (The 10 Rules of Successful Nations), founder of the investment firm Breakout Capital, argues that the U.S. government’s reliance on “easy money”—a catchall term for state interventions, including lowering interest rates, buying bonds, and bailing out corporations—is driving wealth inequality, the proliferation of monopolies, and the ballooning of the national debt. According to Sharma, central banks that lend money on generous terms to struggling companies stymie competition and compound market inefficiencies, contributing to losses in national economic production. Because wage growth depends on productivity increases, Sharma contends, these irresponsible lending habits, paired with bailouts for the wealthy, are widening the gap between rich and poor. Unfortunately, the proposed solutions are less than inspiring. He argues that doing away with market interventions will allow companies to rise and fall on their own merit, with the most productive outfits coming out on top. However, the implication that increased productivity will lead to higher worker wages doesn’t address the possibility that executives could simply pocket the gains for themselves. To Sharma’s credit, he’s astonishingly forthright about the downsides of less intervention, admitting somewhat glibly that more frequent downturns are the price society pays for “economic freedom” (“Some degree of suffering is a given in life”). This is unlikely to sway readers who don’t already share its conservative fiscal outlook. (June)