“Work hard, get ahead.” This is the economy’s first law, as simple as gravity and just as inevitable. Every paycheck is a precise measure of your effort and talent; the skilled and productive earn the highest wages. Here, merit is king, fortune truly favours the bold, and the invisible hand arranges resources with the precision of a watchmaker. Governments exist mostly to observe. As everybody knows, free markets built our wealth; and any tinkering is heresy.

Entrepreneurs—not bureaucrats—are the heroes of this story. Ideas accelerate at every turn. Startups ignite breakthroughs like rockets, soaring from garages and basement offices to global dominance. Finance channels capital to the boldest ventures; debt and credit lubricate the system, empowering the builders. Creative destruction is both principle and spectacle: firms that falter vanish, making way for leaner, faster competitors. Nothing escapes discipline; competition sharpens every edge, and rewards flow swiftly to the deserving. No company is too big to fail if it has earned its fate. Survival is the ultimate badge of merit—move fast, break things, disrupt—or disappear. The spoils go to the fittest.

Clearly, inequality is an engine of progress. Everywhere, big rewards spark big ideas. Greed is great—without incentives, who would risk everything? Self-interest drives collective gain, and trickle-down ensures that as the rich prosper, everyone benefits. The rising tide lifts all boats!

Opportunities abound for those bold enough to seize them. The playing field is immaculate: from rags to riches is not a fairy tale, but a standard itinerary. Background, race, gender, family history? Irrelevant. Pull yourself up by your bootstraps—poverty is just a choice. Anyone can be an entrepreneur. Education is your key to the boardroom; human capital is your ticket to Wall Street. Who wouldn’t want to be the wolf for a change?

All of this is powered by technology, the true lifeblood of progress. It fuels exponential growth, flattens hierarchies, and opens doors for everyone. Driven by the knowledge economy, ideas are the new oil, and intelligence trumps brute force. Digital platforms democratize entrepreneurship like never before—every smartphone a potential business, every app a path to fortune. Manufacturing jobs vanish, relics of a more primitive age. The gig economy turns everyone into micro-entrepreneurs, masters of their own destiny. Algorithms optimize the world with a precision humans could never match. And soon enough, AI will save the climate. Drill, baby, drill!

No other system can match ours! The fall of the Berlin Wall cemented our triumph; every alternative—especially socialism—has been found wanting. And it’s no wonder. Markets are marvels of efficiency and stability. Millions of rational decisions knit the economy together; prices, supply, and demand achieve a precision no planner could ever replicate. Rational investors, diversified portfolios, and well-tuned incentives keep volatility at bay. Crises arise only when someone meddles—regulators, outsiders, or the occasionally reckless…

And not only nationally. Trade binds the world into a vast network of peace and prosperity. Ah, the poor, the poor—when developing nations stumble, it’s largely their own doing. Africa, for instance, was never quite cut out for business. No pain, no gain…

So, think like an owner! Move fast, break things. Private enterprise delivers what people really want; while bureaucrats get stuck in their own incompetence.

Really, this is the finest system ever devised. Competition breeds excellence, greed fuels innovation, and the invisible hand ensures that self-interest somehow serves the common good.

This is the promise. This is the gospel. This is what they tell you.

But here’s what they never told you…

Take a moment to reflect: how many of these “truths” did you already accept while reading the introduction? How much do you trust the gospel you were just told?

Inspired by Ha-Joon Chang’s 23 Things They Never Told You About Capitalism, we’ve curated a selection of the most pernicious myths shaping our economic imagination. Each myth unpacks a carefully polished story—the story they want you to believe—and reveals what they never told you.

Have a look: how many of these myths did you spot in the story above?

What they tell you: In wealthy countries, workers earn high wages because they are simply more skilled, more productive, and more efficient than their counterparts elsewhere. Talent, productivity and above all individual effort alone drive the big paychecks, and markets dutifully reward those who perform.

The reality: The truth is far more institutional than individual. Most of the difference in pay between, say, a Swedish bus driver and an Indian one is not explained by skill or effort, but by labor laws, unions, social insurance, and restrictions on mobility. Only about 20–40 % of the wage gap reflects differences in human capital, while the remaining 60–80 % stems from these structural factors (Chang 2002; Freeman 2007; Rodrik 2011; OECD 2022). Ironically, the Indian driver may actually be more productive—navigating seven lanes of chaotic traffic with fewer safety margins—yet earns a fraction of the Swedish salary, which ranges from 172,200 to 251,500 SEK per year (€15,500–€22,600). The same lesson applies to those famous European productivity league tables: Germans and the Dutch record hourly productivity figures of €94 and €91 respectively (Eurostat 2023), but these headline results are the product of powerful collective bargaining, robust union coverage, national infrastructure, sectoral specialization, coordinated industrial policy, and social norms—not simply individual brilliance (Hall & Soskice 2001; Esping-Andersen 1990; Chang 2002; Atkinson 2015). Detailed breakdowns show that in many countries, around 61% of the labor productivity gap with the US is driven by differences in total factor productivity not simply capital or skills. In the Netherlands, recent labor productivity growth has been dampened by 0.5 percentage points per year due to structural shifts (CBS 2024). In short, “high wages” in rich countries are less a reward for individual brilliance than the outcome of carefully designed institutional frameworks.

What They Tell You:
Britain and America owe their prosperity to a bold commitment to free markets. The textbooks insist that early adoption of laissez-faire, open competition, and minimal government was the true secret behind Western economic dominance.

The Reality:
In fact, Britain was the world’s most aggressive protectionist during its industrial ascent, maintaining average tariffs of 45–55% on manufactured goods until the 1840s (Chang 2002, Bairoch 1993). Only after capturing about half of global manufacturing exports did it begin to lower trade barriers, by which point it could outcompete rivals without fear (Chang 2002). The U.S. followed the same script: from the 1820s to the 1890s, tariffs averaged 35–50%, fueling industrial growth and shielding infant industries (Irwin 2011). Removing these tariffs would have halved U.S. textile output, according to counterfactual estimates (Harley 1992b). Meanwhile, British imperial preference nearly doubled exports to colonies like Canada (Keay & Varian 2024). Every high-income country has relied on protection, subsidies, and industrial strategy—none has reached prosperity through free-market orthodoxy alone (Chang 2007; Rodrik 2007; Reinert 2007; Juhász et al. 2023). The lesson, as Chang sums up, is that free markets were never the real engine of Western wealth—they were the after-dinner sermon.

What They Tell You:
Wealthy countries thrive because they trust the free market. The whole point of capitalism, we are told, is that prosperity comes from competition, private enterprise, and as little government planning as possible. Planning, after all, is for communists; in the West, government’s job is to keep the lights on and then get out of the way.

The Reality:
In truth, advanced economies are quietly but pervasively planned. Across the OECD, public spending hovers between 40 and 50% of GDP, funding not only pensions, health, and education but also infrastructure, industrial policy, defense, R&D, and public procurement. France and Sweden now route over half their national income through the public sector, with the UK and Germany close behind. Government outlays have grown steadily since the mid-20th century, mainly due to social programs, integrating the state deep into economic outcomes. Western governments steer markets through active macroeconomic policy, regulation, crisis management, and strategic investment. Far from being a product of laissez-faire, modern prosperity is underpinned by institutionalized planning on a massive scale. Modern prosperity, in short, owes less to “free markets” than to planning by other means; the real divide with communism is not whether you plan, but how.

What They Tell You:
Market economies run on prices. Every good and service finds its place through the magic of supply and demand: prices rise, buyers and sellers adjust, and somehow, everything from fresh bread to factory robots ends up where it’s needed.

The Reality:
Most coordination in modern economies happens not through prices but inside organizations—private firms, government agencies, and sprawling bureaucracies—by command, plan, and internal rules. In the United States, non-market transactions among private and public entities make up the majority of economic activity, with large corporations internally managing over 60% of production, procurement, and distribution as far back as the late 19th century and continuing today (Coase 1937; Chandler 1977; Farrell & Shalizi 2022; Chang 2010). Globally, between a third and half of international trade is actually intra-firm, taking place within multinationals rather than through open markets (OECD 2023). In advanced economies, estimates show that up to 70% of output is planned, coordinated, and delivered within firms or the public sector, not by “the invisible hand.” As digital tools amplify the reach of corporate planning, the fairy tale of pure price coordination grows more remote—revealing that, behind the scenes, modern capitalism runs on a surprising amount of deliberate organization.

What they tell you:
Governments, we’re told, are hopelessly inefficient. Public officials meddle, paperwork piles up, and taxpayer money disappears down bureaucratic black holes. Meanwhile, real progress—especially the dazzling innovations that change our lives—comes from nimble entrepreneurs and market competition. If you want something done well, keep it out of government hands.

The reality:
The evidence shows the opposite: the world’s most transformative breakthroughs—from the internet and GPS to modern pharmaceuticals and green energy—emerged from long-term public investment, not just private venture. In the United States, over 70% of the top 20 most transformative innovations since 1945 were directly funded or developed through federal agencies, including DARPA, the NIH, and NASA (Block & Keller 2011). Decades of innovation studies confirm that the biggest leaps in technology—those underpinning entire industries—depend on public R&D, basic science, and targeted missions (Mazzucato 2013; OECD 2019). Countries with the highest state capacity and sustained government R&D spending—such as the U.S., Germany, Japan, and South Korea—consistently outperform peers in patenting rates, GDP per capita, and crisis management. While private companies excel at incremental and market-driven improvements, the “inept state” myth crumbles in the face of evidence: effective, well-funded public sectors are the hidden engine of modern prosperity, not just market efficiency.

What they tell you:
In a fair society, everyone starts the race from the same line. As long as opportunity is open and rules are applied equally, anyone—regardless of background—has the same real chance to succeed. The market simply rewards those who make the most of their opportunities, and any differences in outcome must reflect differences in talent, effort, or ambition.

The reality:
In practice, equal opportunity is little more than a comforting fiction when starting points are so wildly unequal. Wealth, family background, education quality, social capital, and geography still shape life chances more than official policies. Children born into the top income quintile are about four times more likely to finish higher education than those in the bottom, and around 50% of economic advantage is transmitted from parents to children (OECD 2018; Corak 2013). In many Western countries, it takes three to five generations—60 to 100 years—for families at the bottom to reach the average income. Discrimination and inherited privilege persist across race, class, and gender, making equal opportunity as much an aspiration as a reality (Sandel 2020; Atkinson 2015; Goldthorpe 2016; Piketty 2020). Far from being a guarantee of fairness, “equal opportunity” often just legitimizes entrenched inequalities.

What they tell you:
Give people joint access to a resource, and you’ll get disaster. Without private property or state control, everyone grabs what they can—fisheries are emptied, forests disappear, and shared pastures become barren. That’s just human nature: the “tragedy of the commons” ensures that collective resources will inevitably be ruined by overuse.

The reality:
The classic “tragedy of the commons” model (Hardin 1968) and stylized Prisoner’s Dilemma experiments (Axelrod 1984) fail to account for how people actually behave in real communities, where communication, reputation, repeated interactions, and social norms matter. Decades of fieldwork, economic research, and Nobel-winning theory reveal that shared resources can be managed sustainably by communities themselves, often outperforming both private and state-run alternatives. Elinor Ostrom’s seminal studies documented how local groups—from irrigation farmers in Nepal to fishers in Maine—develop rules, monitor use, and enforce sanctions to keep the commons thriving (Ostrom 1990). Empirical reviews have identified eight design principles for successful commons governance, including clear boundaries, participatory decision-making, and locally tailored enforcement. Studies across anthropology, economics, and political science find that cooperation, trust, and long-term relationships routinely prevent the “tragedy”: for example, Ostrom’s analysis of hundreds of cases worldwide showed that commons are not only viable, but often more robust than privatized or nationalized systems (Ostrom 2009; Cox et al. 2010; Fehr & Gächter 2000). Far from being doomed, well-managed commons remain a foundation for livelihoods and ecological sustainability—challenging the myth that collective action always ends in ruin.

What they tell you:
We live in an age where brains beat brawn. The old factories and heavy industries have faded into the background, replaced by dazzling knowledge work, digital services, and creativity. Modern prosperity, we’re told, is all about coding, consulting, and designing, not making or moving physical things. Manufacturing is yesterday’s news—the real value now lies in the weightless world of information.

The reality:
The “knowledge economy” is largely a statistical illusion. When measured at constant prices, global manufacturing output has remained stable or grown for over thirty years, with world manufacturing value added at around $16 trillion in 2023. The apparent shrinking of manufacturing’s share of GDP is due mainly to higher inflation in services, not an actual drop in industrial production. In fact, only in the UK has real manufacturing output truly declined over recent decades. Manufacturing remains essential: it drives productivity growth, exports, technological progress, and employment multipliers. Germany still gets over 20% of its GDP from manufacturing; U.S. real manufacturing output is at or near record highs except during recessions. Even high-value “knowledge” services depend on an industrial foundation—business services and IT are anchored by manufacturing clients and supply chains. No country has achieved high-income status without a strong industrial base, and so-called “knowledge economies” are built on, not independent of, manufacturing. The myth survives because of misleading nominal statistics, but the evidence shows: services rise on the back of industry, not the other way around.

What they tell you:
If you want to make a nation richer, just send more children to school. The secret to prosperity, we’re told, is straightforward: invest in education, upgrade your workforce, and economic growth will follow. Education is the great equalizer and the primary driver of modern development.

The reality:
The evidence tells a more complicated story. Decades of research show that simply raising average years of schooling does not automatically deliver higher national income or innovation. Many countries have increased educational attainment without seeing corresponding growth in GDP per capita. In fact, some nations—despite matching richer countries in schooling—have experienced stagnant or even declining real incomes. The key is what people are educated for: without complementary industrial policy, innovation capacity, and productive employment opportunities, investment in schooling alone yields limited returns. Studies find that cognitive skill development and educational quality—not just years in the classroom—matter far more for growth, and even these effects are strongest in countries with strong institutions and demand for skilled labor. For high-income countries, further gains depend on innovation systems and technological upgrading, not more diplomas. The “education equals growth” formula is appealingly simple, but in practice, national prosperity depends on how education is matched to economic transformation—not just classroom attendance.

What they tell you:
America tops the charts. The United States is frequently showcased as the pinnacle of capitalist success—its sky-high GDP per capita is held up as proof that no country on earth delivers a higher standard of living. If you want to see prosperity, just look at the American Dream in action.

The reality:
While the U.S. ranks near the top in GDP per capita—about $67,800 in 2025—it is surpassed by countries like Luxembourg, Switzerland, Ireland, Norway, and Singapore. But GDP is a narrow lens: on the United Nations Human Development Index, the U.S. stands 17th, behind most of Western Europe, Japan, and South Korea. The U.S. lags on indicators such as life expectancy, social mobility, poverty rates, infant mortality, and subjective well-being—domains where countries like Norway, Denmark, Germany, and the Netherlands consistently perform better (UNDP 2025; OECD 2018; Stiglitz 2010). High inequality means America’s impressive GDP figures mask widespread deprivation and insecurity, while nations with more equitable income distribution and stronger public goods routinely achieve higher actual living standards. For all its dollars, the U.S. model falls well short of delivering the world’s best lives.

What they tell you:
Economic growth is the ultimate measure of progress. As the nation’s output expands, so does its welfare—jobs multiply, prosperity rises, and living standards improve. The story is simple: a growing economy lifts all boats, and more growth means a better life for everyone.

The reality:
GDP is a narrow and deeply misleading measure of well-being. It ignores the value of unpaid care work—which keeps households and entire societies functioning, most of it performed by women. It counts ecological depletion and environmental destruction as positive contributions, turning deforestation, oil spills, and resource extraction into supposed “growth.” The financial sector’s explosion since the 1980s, particularly in the UK and U.S., has bloated GDP by including speculative activity that generates little real wealth (Christophers 2013). In Ireland, headline GDP figures have at times diverged from real national income by over 40% due to multinational profit-shifting (OECD 2025). Recognizing these distortions, leading institutions now call for “dashboard” approaches that measure health, education, inequality, and the environment alongside output. Relying on GDP alone risks celebrating growth while ignoring stagnating well-being and mounting ecological harm—the very opposite of progress.

What they tell you:
Western capitalism is built on free markets—spontaneous, self-organizing systems where supply and demand rule. Governments may set some ground rules, but otherwise, the invisible hand coordinates everything, and prosperity flourishes best when politicians stay out of the way.

The reality:
There is no such thing as a truly “free market.” Every market rests on a dense web of rules, rights, and institutions: property law, contract enforcement, bankruptcy courts, financial regulation, labor standards, and central banking. These are all political creations, hammered out through legislation and often fiercely contested. The history of capitalism is littered with examples of governments shaping, defining, and even inventing markets—from land enclosures in England to patent law, financial deregulation, and minimum wage statutes. Varieties of Capitalism research shows that Western countries diverge sharply: the U.S. and UK rely more on “liberal” market structures, while Germany and the Nordics build “coordinated” economies with unions, employer groups, and the state working in concert. None of these systems are natural or automatic. The myth of the “free market” is less an economic fact than a political narrative—one that hides the very real and ongoing role of law, power, and public policy in shaping who wins and loses.

What they tell you:
Competition keeps capitalism honest. Whenever a firm becomes too powerful, rivals swarm in, new ideas flourish, and creative destruction sweeps away the giants. Market power never lasts: sooner or later, the invisible hand makes even the biggest players fight to survive.

The reality:
In practice, market concentration has surged, especially in technology, finance, and digital platforms, where “winner-take-all” effects and powerful network dynamics allow a handful of firms to tighten their grip and block rivals (Autor et al. 2020; Khan 2017). In the U.S., mark-ups—the premium firms charge over their costs—have risen sharply since the 1980s, while measures of market power show a steady increase in dominance by “superstar” firms (Philippon 2019; Zingales 2017). By mid-2025, just five tech stocks accounted for nearly 45% of the Russell 1000 Growth Index, while the ten largest U.S. companies reached a record $22.5 trillion in market capitalization (Morgan Stanley 2025; Voronoi 2025). The technology sector alone delivered more than half of all recent market gains, underscoring its persistent dominance. Rather than dissolving monopoly power, competition now often entrenches it—leaving consumers, workers, and smaller firms increasingly dependent on a shrinking handful of corporate giants (Baker 2016; Piketty 2014).

What they tell you:
At the heart of capitalism is the rational, self-interested individual. Markets are designed on the principle that people act for their own benefit, and the best outcomes emerge when everyone pursues personal gain. Systems that expect altruism are doomed; only incentives aligned to self-interest can get people to work, innovate, or cooperate.

The reality:
Modern research tells a different story. Decades of experimental economics and field studies show that humans routinely act out of reciprocity, fairness, and group loyalty—not just individual advantage (Fehr & Gächter 2000; Bowles & Gintis 2011). In laboratory public goods games, people sacrifice personal income to reward cooperation and punish free riders, even at a cost to themselves. Neuroscientific studies have demonstrated that giving and cooperation activate the brain’s reward centres (Hackel et al. 2017). Cross-cultural research finds that norms of fairness and generosity persist across societies and persistently shape economic life (Henrich et al. 2001). Most strikingly, the more opportunities people have to communicate, build trust, and establish reputation, the higher their levels of cooperation—contradicting the myth of universal selfishness (Fehr & Gächter 2000). Far from being outliers, prosocial behaviour and collective action are the rule, not the exception.

What they tell you:
As the economy expands, everyone prospers. Growth trickles down from boardrooms to shop floors, raising incomes, creating jobs, and ensuring that every new dollar eventually finds its way into the pockets of the many. Inequality, if it exists, is only a temporary stage—rising tides lift all boats.

The reality:
The data tell a starkly different story. Since the 1980s, median real wages in many advanced economies have stagnated or even declined, even as aggregate output and corporate profits soared (Stiglitz 2012; Atkinson 2015). In the United States, the top 1% captured over 35% of total income gains from 1980 to 2020 (Piketty 2014; World Inequality Database 2022). OECD studies show that rising inequality slows economic growth and undermines social mobility (OECD 2015; IMF 2015). By contrast, countries like Denmark and Sweden combine robust growth with low inequality, outperforming on human development, health, and happiness metrics (UNDP 2025; World Happiness Report 2024). The myth of “trickle-down” prosperity is contradicted by decades of evidence: left to itself, growth often accumulates at the top, while inclusive policies are needed – and successful - to share prosperity more broadly.

What they tell you:
Industrial policy is a fool’s game. Every time government tries to “pick winners”—by backing certain industries or technologies—it wastes taxpayer money and distorts the market. Real innovation and global competitiveness are forged in the heat of free-market competition, not by bureaucratic intervention.

The reality:
History says otherwise. The world’s most successful economies—Japan, South Korea, Taiwan, Germany—built their industrial might on strategic state intervention: targeted subsidies, selective credit, export discipline, and coordinated technology policy (Amsden 2001; Wade 1990; Johnson 1982; Rodrik 2015). South Korea’s government-backed G7 Program, for example, doubled private R&D spending in electronics and biotech, tripling exports within a decade (ECIPE 2011). Japan’s postwar industrial policy, supporting sectors like steel and semiconductors, catalyzed decades of productivity growth (World Bank 2000). Even the U.S. aerospace and biotech sectors were built on long-term public investment and “winner-picking” by federal agencies. Far from failing, well-designed industrial policies have propelled nations from poverty to global leadership. The lesson: markets may reward winners, but governments help make them.

Continue to myth 17-33 here:

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.