If you’re just joining us, the first half of this journey revealed how the world of capitalism works—or at least, how they tell you it works. Before you dive in, you might want to glance back at the opening myths: the rules of merit, the miracles of markets, the promise of opportunity. Now, we continue the story, uncovering the next set of myths and the truths they obscure. The deeper you go, the clearer it becomes that what you thought was simple, fair, and inevitable is anything but.

The reality:

The data don’t back it up. Empirical studies reveal an inverted U-shaped relationship: moderate government spending supports growth by providing public goods and stability, but excessive size—especially in the context of weak institutions—can slow growth and reduce efficiency (ECB 2011; Bergh & Henrekson 2011). However, academic research shows that countries with robust social protection, high-quality public institutions, and coordinated innovation policy can maintain large welfare states without sacrificing growth or adaptability (Bergh & Henrekson 2011). Nordic economies, where public spending consistently hovers around 45–55% of GDP, outperform most market-driven systems on productivity, employment, and resilience. Universal social protection, active labor market policies, and coordinated innovation systems provide a cushion for households and firms, encouraging risk-taking and adaptation (Esping-Andersen 1990; OECD 2018; Greer et al. 2019). During the COVID-19 crisis, countries like Denmark and Sweden rapidly rolled out coordinated relief that preserved jobs and household incomes, resulting in quicker recoveries than many low-spending peers (Larsen et al. 2023). In these contexts, government is not a brake but a shock absorber and enabler, supporting labor market transitions and innovation. While overextended, poorly governed states may stumble, the evidence from Northern Europe and Central Europe shows that “big government” can foster economic dynamism, not sclerosis.

What they tell you:

Africa remains poor because of its geography, culture, or an inherent “poverty trap.” The story goes that its fate is predetermined: tropical climates, resource scarcity, and centuries-old social structures make sustained economic development impossible.

Critical Reality: Extensive empirical development literature shows that Africa’s persistent poverty is primarily the result of historical and structural factors—including colonial extraction, global economic inequalities, and policy constraints—not inherent deficits in culture or geography (Austin 2010; Rodney 1972; Acemoglu & Robinson 2012; Mkandawire 2001; Maddison 2010). Colonialism fundamentally reshaped African economies by imposing extractive institutions, privileging resource-export models, and disrupting indigenous political and economic structures. European colonial powers prioritized commodity extraction for industrial needs, suppressed local industry, limited economic diversification, and imposed restrictive trade networks, generating long-term developmental challenges (Settles 1996; Heldring & Robinson 2012; Frankema 2025). Furthermore, IMF Structural Adjustment Programs (SAPs) in the 1980s and 1990s, with their focus on austerity, privatization, and deregulation, often deepened social hardships and slowed growth, undermining sustainable development (Massaley 2010; Oberdabernig 2017; Progressive International 2025). These structures continue under international regimes—from unequal trade, debt, and aid dependencies to global corporate extraction and financial outflows. Contrary to deterministic assumptions, African countries with robust institutions and strategic investments have achieved growth rates exceeding global averages. Economic traps persist not from intrinsic limits, but from ongoing power imbalances, weak states, debt service, and poor terms of trade (Sachs et al. 2004; Gore 2003; Chang 2007; Mkandawire 2001). Examples include Ghana, Botswana, Ethiopia, and Rwanda, where effective governance, targeted human capital development, infrastructure expansion, and integration into diversified global value chains have enabled sustained progress (Mkandawire 2001; Page 2012; UNCTAD 2022; UNECA 2018; Fosu 2015; Collier 2007; Nunn 2008; Chang 2002; Jerven 2015; Andrews 2013). These cases highlight that African development is contingent, not inevitable, and that appropriate policies and institutional capacity can overcome historical legacies to achieve enduring economic growth.

What they tell you:

Markets allocate resources impartially; race, history, and colonial legacies are irrelevant—success depends on effort and institutions. Capitalism is “blind,” and past injustices do not affect today’s economic outcomes.

The reality:

A wealth of historical and contemporary research shows capitalism’s foundations lie in centuries of racialized violence and expropriation, from the transatlantic slave trade and colonial land seizures to forced labor, resource extraction, and legal codification of racial hierarchies (Robinson 1983; Harris 1993; Bhambra 2022). These structures have never disappeared: today, racialized and postcolonial labor fills the most precarious and underpaid roles in global supply chains; communities of color are far more exposed to pollution and environmental harm; and ex-imperial powers retain control over global finance, property, and trade law, perpetuating advantage and dependency (Bullard 1990; Tilley & Shilliam 2018; Sanyal 2007). Capitalism’s apparent neutrality masks the continuity of colonial and racial structures across law, labor, and land—making truly impartial outcomes impossible without addressing the enduring legacies of violence and exclusion.

What they tell you:

The poor remain poor because they lack drive, talent, business acumen, or a willingness to take risks. Anyone can make it in a free market so poverty must reflect personal failings. If only they worked harder, innovated, or had the right mindset, they too could rise from rags to riches.

The reality:

Research tells the opposite story: people in low-income countries are more likely to be entrepreneurs than their wealthy-world peers, not less. Across sub-Saharan Africa, more than 26% of the non-agricultural workforce runs informal or micro-enterprises—compared to single-digit rates in most rich countries (ILO 2011; Banerjee & Duflo 2011; Williams 2018). Street vending, petty trade, and small service businesses proliferate out of sheer necessity, not ambition: in the absence of secure jobs, people hustle to survive. What really divides poor and rich isn’t entrepreneurial spirit, but access to infrastructure, legal protection, credit, and reliable institutions (Naudé 2011; Berner et al. 2012; World Bank 2020). In rich economies, most entrepreneurs scale businesses with the support of finance, education, and social safety nets; in poor economies, “entrepreneurship” is often a last resort. Poverty reflects the failure of institutions, not a lack of effort or talent. The idea that the poor lack entrepreneurship is not only false—it’s precisely backward.

What they tell you:

Markets are marvels of efficiency. Left to their own devices, they allocate resources, set fair prices, and correct any errors through the magic of competition. Sure, there may be the occasional hiccup, but the invisible hand always finds the best solution—no government meddling required.

The reality:

In the real world, markets are riddled with failures—not occasional, but pervasive and persistent. Foundational economic theory—including the general equilibrium models of Arrow & Debreu (1954), work on information asymmetry (Akerlof 1970), and the economics of market imperfections (Stiglitz 1989)—demonstrate that imperfect information, power asymmetries, network externalities, environmental spillovers, and behavioral biases routinely distort market outcomes (Shiller 2000; Chang 2002; Mirowski 2011). From lemons in used-car markets to pollution in the atmosphere, “market perfection” is more the exception than the rule. Empirical evidence across sectors confirms persistent failures: monopolies, principal-agent problems, under-provision of public goods, negative externalities, and recurring financial instability demand government regulation, antitrust action, and public intervention to safeguard social welfare (Mazzucato 2018; Bowles & Polanía-Reyes 2012; Stiglitz 2010; Tirole 2015; Kirman 2010; Schmalensee 2018; Wu 2018). Financial crises are not rare black swans but regular features: since 1970, the world has seen more than 150 banking crises, each one laying bare the limits of self-correcting markets (Laeven & Valencia 2020; Reinhart & Rogoff 2009). The ubiquity of market failures means that prudent regulation and institutional oversight are essential for economies to function at all (IMF 2014; Ghosh & Qureshi 2018). The invisible hand, it turns out, often needs a very visible helping hand just to keep markets from derailing entirely.

What they tell you:

Nations that do business together do not go to war. Economic interdependence turns rivals into partners, binding countries so closely through trade and prosperity that peace is the inevitable result. Commerce, not conflict, rules the modern world; the more we trade, the safer we become.

The reality:

The reality is, wars have repeatedly broken out between countries with deep trade ties. The great powers of Europe fought World War I despite being each other’s top trading partners (Ferguson 2006; Barbieri & Schneider 1999). Today, the U.S. and China remain major trading partners amid escalating military and diplomatic tensions (Gartzke 2007; Ripsman & Blanchard 2013). Economic interdependence can heighten rivalry, expose vulnerabilities, and even trigger conflict, especially when trade benefits are uneven or expectations of future gains collapse (Copeland 2014; Oatley 2019). Structural asymmetries and uneven gains from trade sometimes exacerbate tensions, with weaker states potentially resorting to conflict to redress perceived economic disadvantages (Keshk et al. 2004). Trade relationships may restrain full-scale wars when mutual dependence and high opportunity costs exist, yet they can simultaneously increase the risk of low-level militarized disputes and diplomatic conflicts, especially where economic interdependence is asymmetrical or expectations of future gains decline (Awad-Monteiro 2013; Barbieri 1996; Crescenzi 2023). The Russia–Ukraine war’s disruption of global food and energy supplies is a stark reminder that trade can amplify risks rather than guarantee peace (Awad-Monteiro 2013; Oatley 2019). While commercial ties may help restrain war under certain conditions, peace depends on robust political institutions and equitable international relations—not commerce alone.

What they tell you:

Big rewards drive big ideas. Without large differences in income and wealth, there would be no incentive for risk-taking, entrepreneurship, or creativity. Inequality fuels ambition and ensures that only the most innovative rise to the top, delivering progress for all.

The reality:

The evidence shows that excessive inequality actually undermines innovation over time. While high rewards can concentrate income among top inventors, persistent inequality restricts access to education, entrepreneurial opportunities, and social mobility, dampening the broader ecosystem needed for sustained creativity (Piketty 2014; Stiglitz 2012; Aghion et al. 2019). Empirical research finds that inequality reduces aggregate demand, hinders cooperation and trust, and encourages incumbents to use market power to stifle new competitors (OECD 2015; IMF 2015; Bowles & Gintis 2011; Rajan 2010). The relationship between inequality and innovation is often inverted U-shaped: while moderate disparities may spur effort, too much inequality depresses innovation—especially in lower-income countries or where institutions are weak (Foellmi & Zweimuller 2024). More inclusive societies, by contrast, tend to foster broader participation in invention and entrepreneurship, leading to more resilient and sustainable growth (Wilkinson & Pickett 2010; Atkinson 2015; Autor et al. 2020). The myth survives because a few star innovators capture headlines, but the data are clear: extreme inequality stifles the very dynamism it claims to unleash.

What they tell you:

Markets are blind to gender. Capitalism rewards talent, effort, and productivity, treating everyone the same. Pay gaps and glass ceilings are relics of the past—today, the playing field is level, and anyone can succeed on merit alone.

The reality:

Modern economies run on vast amounts of unpaid and underpaid care work, most of it performed by women and systematically excluded from GDP and firm performance metrics (Folbre 2001; Elson 1999; UN Women 2019). Globally, women perform about 76% of all unpaid work and continue to earn 13–20% less than men for equivalent roles, with gaps especially wide for women of color and in senior positions (ILO 2018; OECD 2020; TUC 2025; Goldin 2014; Blau & Kahn 2017). Occupational segregation, the “motherhood penalty,” and the chronic undervaluation of care, education, and hospitality jobs persist across both rich and poor countries (Budig et al. 2012; Charles & Grusky 2004; World Economic Forum 2023). Women are significantly more likely to hold part-time or precarious work and are underrepresented in high-wage industries and leadership roles (TUC 2025; Living Wage Foundation 2025). Far from being gender-neutral, capitalism systematically masks and reproduces these inequalities—making “equal opportunity” an ongoing struggle, not an accomplished fact (Fraser 2016; Duffy et al. 2015; Ghosh 2020).

What they tell you:

Well-functioning markets are naturally stable. Prices adjust efficiently, risks are diversified, and rational expectations keep volatility in check. Crises are rare accidents—if they occur at all, they’re the fault of outside interference, not the market’s design.

The reality:

Markets are not inherently stable—financial history and economic theory show that markets are prone to cycles of instability, volatility, and crisis. Recurrent financial shocks—from the Great Depression (1929), Black Monday (1987), the Asian Financial Crisis (1997), and the 2008 meltdown—reveal deep vulnerabilities driven by leverage, herd behavior, imperfect information, and regulatory blind spots (Minsky 1986; Kindleberger 2005; Shiller 2000; Akerlof & Shiller 2009; Stiglitz 2010; Taleb 2007; Reinhart & Rogoff 2009; Gorton 2010; Mirowski 2013). Asset bubbles, psychological biases, and complex financial instruments regularly magnify risk and obscure true exposures (Gennaioli & Shleifer 2018; Brunnermeier 2009; Farmer 2012). Repeated government bailouts and central bank interventions underscore how modern financial systems depend on external rescue, not self-correcting mechanisms (Pistor 2019). Belief in stable markets often stems from “financial myths” that downplay the possibility of rare but catastrophic events, leading to underpreparedness and excessive risk-taking by market participants and regulators alike (Boston Fed 2021). Ongoing challenges include managing systemic risk and avoiding the illusion that diversification or historical data alone can guarantee stability. The myth of inherent market stability leads to underpreparedness and excessive risk-taking, when in fact, prudent oversight and robust regulation are essential to prevent crises and safeguard economic welfare

What they tell you:

Financial markets efficiently allocate capital to its most productive uses, reward innovation and entrepreneurship, and provide the liquidity that drives growth. Bankers and investors are the essential matchmakers of capitalism, channeling savings into productive ventures and powering the real economy.

The reality:

Financial markets are often inefficient and distortive. Unregulated financial systems routinely divert resources away from productive investment and innovation, fueling speculation, asset bubbles, and short-termism instead. Since the 1980s, the financial sector’s soaring profits and compensation have coincided with stagnant real-economy investment and productivity growth, as capital and talent are drawn into trading, arbitrage, and rent-seeking rather than new technology or industry (Epstein 2005; Krippner 2011; Philippon 2015; Mazzucato 2018; Kay 2015). In the run-up to the Global Financial Crisis, over $5 trillion flowed into mortgage-backed securities and other speculative products, triggering catastrophic losses while delivering little genuine innovation (Stiglitz 2010; Gorton 2010). This “financialization” not only increases economic fragility and crisis risk, but also amplifies inequality—benefiting financial elites while wage growth stagnates for most workers (Cecchetti & Kharroubi 2014; Tori & Onaran 2017; IMF 2014). The notion of finance as a neutral, efficient intermediary ignores these persistent distortions and real-world failures: without strong regulation and governance, finance can become a drag on true economic progress, not its engine.

What they tell you:

Debt and credit are neutral lubricants of the economy. By matching savers with borrowers, they support entrepreneurship, fuel investment, and enable anyone with drive to build a better future. As long as markets are free, debt simply helps money flow to its most productive uses.

The reality:

Debt and credit are powerful instruments of discipline and inequality, not just neutral tools for growth. Excessive credit booms frequently precede financial crises, concentrating risk and wealth while enabling rent extraction by financial elites (Mian & Sufi 2014; Kumhof & Rancière 2010; Schularick & Taylor 2012; IMF 2014; Reinhart & Rogoff 2009). Debt relationships structurally reinforce inequalities—creditors wield significant economic and political power over debtors, often extracting rents and shifting crisis adjustment burdens to less powerful groups (Lapavitsas 2013; Turner 2016; Palley 2007; Pistor 2019). Debt also perpetuates social stratification by linking financial obligations with wider systems of social dependence, patronage, and governance control (Hager 2015; Guérin 2014; Heintz 2012).In the 2008 financial crisis, household debt in the U.S. reached record levels, triggering a wave of foreclosures and millions of job losses while banks were bailed out at public expense (Stiglitz 2010; Gorton 2010). Far from being a simple financial lubricant, debt is embedded in networks of power and social relations that shape economic outcomes, exacerbate inequality, and influence political processes—requiring deliberate regulation and social policies to manage its risks and redistributive effects (Graeber 2011; Streeck 2014; Hudson 2018).

What they tell you:

In today’s world, multinational corporations operate above borders, free from national constraints. Globalization has made states irrelevant: stateless capital now moves, invests, and profits wherever it likes, and no government can control the forces of global business.

The reality:

Global capitalism is anchored in national power, not stateless mobility. Multinational corporations depend fundamentally on home-state legal protections, state-backed credit, diplomatic support, and institutional environments for their operations and profitability (Pistor 2019; Helleiner 2014; Rodrik 2011; Dunning 1998). During economic crises, such as the 2008 crash and the COVID-19 pandemic, corporations repatriate profits and mobilize influence to secure domestic bailouts and regulatory favors, exposing deep dependencies on national institutions rather than stateless freedom (Ghemawat 2017; Oatley 2019; Coe & Yeung 2015). More than 80% of global foreign direct investment is concentrated in OECD countries, and U.S. or UK law governs the vast majority of international contracts (Yeung 2016; Dunning & Lundan 2008; Block 2012). Far from being detached, global supply chains and financial flows remain tightly controlled by a handful of powerful home jurisdictions. Thus, the image of “stateless capital” obscures the reality that states continue to wield significant power and influence within global capitalism, shaping rules and conditions under which much of the world’s wealth and investment flows are created and controlled (Zingales 2017; Palan 2010).

What they tell you:
The free movement of capital disciplines governments, rooting out inefficiency and corruption. Global market discipline ensures that only the best policies survive—countries must reform, compete, and modernize, or investors will take their money elsewhere.

The reality:
Capital mobility does not inherently improve governance or accountability; in fact, empirical evidence shows it often produces the opposite effect. Capital mobility frequently triggers a “race to the bottom” in taxation, wages, and environmental regulation as governments compete to attract or retain mobile capital, eroding fiscal capacity and democratic control (Streeck 2014; Rodrik 2011; Palley 2007; Pistor 2019; Helleiner 1994). This dynamic shrinks the policy space available for public investment, social redistribution, and regulatory autonomy, often empowering transnational elites at the expense of broader populations (Rodrik 2011; Ostry et al. 2016; Gabor 2021; Epstein 2005; Jessop 2015; Atkinson 2015; Claessens & Laeven 2003). Research using firm-level data from countries like China shows that firms with higher capital mobility may experience complex interactions with governments, where collusion or political connections can mediate tax burdens, but generally, mobile capital loses long-term bargaining power with governments in contexts with strong anti-corruption controls (Chen 2022). Furthermore, popular mobilization and political party orientation influence the ability of states to regulate capital flows and resist neoliberal restructuring (Bonizzi et al. 2022; Grugel & Riggirozzi 2012). The idea of global “market discipline” must be critically qualified: its effects depend heavily on institutional context, social coalitions, and state capacity, and it often limits rather than enhances democratic governance and equitable economic policy.

What they tell you:
The fall of communism and the collapse of the Berlin Wall proved once and for all that capitalism and free markets are the only viable system. Every alternative—whether cooperative, democratic, or state-led—is utopian, outdated, or already proven to fail. History has spoken: there is no alternative.

The reality:
There are, in fact, many alternatives to the dominant model of capitalism. Economic history and comparative research show that diverse varieties of capitalism, as well as post-capitalist and mixed systems, have coexisted, competed, and outperformed market fundamentalism in terms of stability, equity, and innovation (Chang 2002; Rodrik 2007; Polanyi 1944; Blyth 2013; Atkinson 2015; Ostry et al. 2016). Concrete institutional experiments—including cooperatives, participatory budgeting, the solidarity economy, and regulated or coordinated market economies—demonstrate that flexible, inclusive, and democratic arrangements can deliver better outcomes than rigid neoliberalism (Sen 1999; Mazzucato 2018; Stiglitz 2010; Esping-Andersen 1990; Bowles & Gintis 2011; Alperovitz 2013; Novy 2018; Haiven 2018). The TINA narrative functions primarily as an ideological device to suppress debate and imagination, not as an empirical fact. As Mark Fisher and others have argued, capitalist realism—the idea that nothing else is possible—limits the imagination, but concrete alternatives are emerging globally in response to political and economic crises, challenging the inevitability of the status quo (Fisher 2009). The lesson from history is clear: the “no alternative” claim is a myth, and the real world is full of live, evolving alternatives.

What they tell you:
Technology evolves naturally, selected by the invisible hand of the market. Progress is inevitable and unbiased: inventions emerge, are adopted because they are efficient, and shape society according to their own inner logic. Politics, power, and social interests have no real say in the direction or impact of technological change.

The reality:
Technological change is deeply political and contingent, not neutral or inevitable. Science and technology studies show that the development, direction, and diffusion of technology are shaped by power, funding priorities, regulation, and the interests of dominant social actors—not simply by efficiency or market demand (Jasanoff 2004; Hughes 1987; MacKenzie & Wajcman 1999; Mazzucato 2013). Intellectual property regimes, state policy, and lobbying efforts all determine which innovations move forward and who benefits from them (Nelson 1993; Freeman & Soete 1997; Bijker et al. 1987). From the fossil fuel lobby’s long campaign against renewable energy to the rise of surveillance capitalism and digital monopolies, recent history is full of cases where political and corporate actors have shaped—and disciplined—technological trajectories to serve their own interests (Zuboff 2019; Morozov 2011; Estrin 2024; Cohen 2025). The result is a landscape in which technological change reflects—and often entrenches—social conflict and power relations, offering not inevitability but a field for contestation and democratic intervention.

What they tell you:

The information technology revolution has produced the most dramatic leap in human progress ever seen. Digital innovation has transformed productivity, prosperity, and daily life—outpacing all previous waves of industrial change and ushering in a new golden age.

The reality:

The economic impact of the IT revolution has often been overstated. Empirical studies show that its productivity gains lag far behind earlier innovations such as electrification, sanitation, and basic household appliances like the washing machine, which revolutionized life expectancy, gender roles, and daily labor (Gordon 2016; Syverson 2017; Crafts 2002; Chang 2007). The famous “Solow paradox” highlights how rapid growth in computer technology failed to translate immediately into broad productivity gains (Solow 1987). Most IT-driven progress has been concentrated in a few sectors and geographies, with ambiguous or uneven effects on inclusive well-being and long-term economic growth (Jerven 2015; OECD 2018; Bresnahan & Trajtenberg 1995; David 1990). For example, while firms like Wal-Mart used ICT to revolutionize retail productivity, it took decades for these gains to diffuse, and overall societal benefits remain modest compared to earlier technological revolutions (Hughes 2005). As Daron Acemoglu’s latest research shows, digital transformation increasingly results in asymmetric appropriation of benefits, with concentrated gains for platform owners and limited positive spillovers for workers or society at large (Acemoglu 2024). The narrative of IT as the greatest driver of progress overlooks the complex, gradual, and uneven process of technological diffusion—and the essential social and institutional foundations required for real, broad-based transformation (Mazzucato 2013; Crafts & Mills 2017).

What they tell you:
Platforms are the destiny of business—every company must become a platform or be left behind. Platforms drive the next wave of capitalism, creating exponential growth, network effects, and new markets. By connecting people, lowering barriers, and distributing opportunity, platforms democratize commerce, empower entrepreneurs, and benefit everyone who participates. In the platform age, the rising tide lifts all boats. Again.

The reality:
Platforms are not neutral marketplaces—they are private empires that write the rules, extract rents, and wield unprecedented control over users, workers, and even entire industries. Instead of democratizing commerce, platform companies use secret algorithms and “code as law” to enforce dependency, surveil behavior, and amplify monopoly power—turning millions of gig workers and small businesses into subordinate tenants (Srnicek 2017; Rahman & Thelen 2019; Zuboff 2019; Kenney & Zysman 2016). The real power of platforms lies in their ability to set terms unilaterally, discipline participants, and lock users into proprietary ecosystems at scale (Khan 2017; Sundararajan 2016; Rosenblat 2018; Pasquale 2015). As Yanis Varoufakis warns, digital capitalism increasingly resembles “techno-feudalism,” with a handful of cloud emperors dominating the digital economy, extracting value from all sides, and deepening new forms of dependency and inequality (Varoufakis 2023). Empirical research confirms that platformization centralizes control, erodes competition, and imposes new hierarchies—shifting economic power from open markets to private, algorithmic fiefdoms (Gawer 2021; Cusumano et al. 2019; Rahman & Thelen 2022). The myth of platform neutrality is shattered by the facts: in the digital age, platforms are the new gatekeepers of power and dependency, not champions of democratic markets.

Thanks to Graham Boyd for suggesting:

Bonus Myth – With Risk Comes Reward: On Average, Everyone Can Win

What they tell you:

Risk is the engine of progress. In capitalism, anyone willing to take a chance, start a business, or invest in new ideas stands to win big. Sure, not everyone will succeed every time, but the system is fair in the long run—if you “play the game” correctly, the rewards will, on average, come your way. Over time, everyone who works hard and perseveres will get a fair shot. In capitalism, risk-taking is the natural path to collective prosperity. The more risk, the better—for everyone.

The reality:
In the real world, many outcomes are distributed according to skewed, fat-tailed, or power law distributions. The expectation value (mean) is driven by a small number of extreme outliers, while the overwhelming majority experience losses or stagnation (Taleb 2010; Odlyzko 2009; Piketty 2014). In fields like venture capital, speculative trading, and entrepreneurial activity, the "average" return is not representative of the typical experience: most participants lose money or barely break even, while a vanishingly small minority capture outsized rewards (Malkiel 2016; Burton & Shah 2013; S&P Global 2023). The use of expectation value to justify forecasts and risk-taking systematically obscures the reality that the median and modal outcomes are negative for most people. Empirical studies confirm that, in both financial markets and innovation-driven sectors, upwards of 80–90% of participants underperform even risk-free alternatives, while winner-take-all effects concentrate wealth and opportunity at the top (Berk & DeMarzo 2022; A. Odlyzko, 2009). This dynamic underpins the broader ideological function of the myth: it allows economic elites and policymakers to frame structural precarity and inequality as the natural price of progress, while concealing the fact that “risk” is largely socialized—borne by workers, small investors, and the public—while “reward” is privatized (Goldstein & Yang 2021; Autor et al. 2020). The promise that “everyone can win on average” is not only mathematically incoherent in systems dominated by extreme value dynamics, but politically toxic: it rationalizes precarious work, deregulation, and rising inequality under the banner of opportunity. The facts are unequivocal—most people in capitalist systems absorb the downside risk, while the upside accrues to a tiny minority, rendering the average reward a statistical fiction, not a social reality.

Partly based on: Ha-Joon Chang, 23 Things They Don't Tell You About Capitalism, Penguin, 2011

Disclaimer: This text was partly created with the support of AI and may contain errors or omissions. Please read critically.