Capitalism didn't fail. It was ruined by easy money

Best-selling author Ruchir Sharma puts the blame squarely on over-expansive governments and central banks.

- Vikram Khanna

After the 2008 global financial crisis, the US Federal Reserve slashed interest rates to near zero and kept them there for seven years after the crisis had passed.

In 2023, US companies were still binging on Covid-19 relief, even though the pandemic was long over.

About 20 per cent of US and European companies are reckoned to be zombies, kept alive by artificially low interest rates and forbearance by their lenders.

Over the last 20 years, the US government introduced around 3,000 new regulations every year, but withdrew only 20.

These are some of the results of decades-long interventions by the US government, as well as the US Federal Reserve, in the form of easy money, regulatory overkill and a bailout culture that has cut productivity and weakened economies. And it's not only prevalent in the US but in Europe as well.

That's the main takeaway from Ruchir Sharma's fifth and latest book, What Went Wrong With Capitalism.

In theory, capitalism is supposed to be the system that prevails in most advanced economies. It worked well for most of the post-World War II era, delivering high economic growth and decent living standards for the majority of people.