Capitalism fails at meritocracy

A lot of critiques of capitalism focus on one central problem it creates: inequality. The fact that inequality exists in capitalism is in fact the modus operandi of the economic system. It’s a feature, not a bug, and the left points this out constantly.

In my opinion, an issue often overlooked in these critiques is that capitalism is quite orthogonal to merit. It superficially seems to reward merit, hard work, and value creation, but in reality it is not assured that this will be the case.

The myth of hard work

A lot of defenders of capitalism rely on mostly the same argument: “If you’re poor, it’s because you didn’t work hard enough, made bad choices, or aren’t smart enough.” It’s the core justification for why the system is supposedly fair.

But here’s where it breaks down completely.

A physicist with a PhD can spend a decade working at Poland’s National Nuclear Research Center (NCBJ), one of the country’s most strategically important institutions, and earn roughly the same salary as a supermarket cashier. Why? Because fundamental research salaries are capped by government budgets, not market demand. The work is valuable to civilization; the market doesn’t price it that way because there’s no direct consumer paying for reactor safety improvements. ¹

Meanwhile, someone with zero qualifications can post photos of their feet on OnlyFans and potentially earn $10,000 a month from strangers on the internet. Both outcomes are equally valid under capitalism. The system doesn’t care about your intelligence, credentials, or contribution to human civilization. It only cares about what people will pay for right now. ²

Two fatal flaws

Inherited capital

Capitalism positioned itself as a meritocratic alternative to feudalism, no more judging people by bloodline. Instead, we got… basically the same system, just with a different justification.

A completely incompetent heir to a billionaire’s fortune still has infinitely more power and resources than a brilliant self-made physicist. They didn’t earn it, most probably they didn’t deserve it. They simply had the luck to be born into the right family. ³

That’s just aristocracy with extra steps.

The market doesn’t value what matters

The free market only prices what people will pay for right now. It has no mechanism for valuing long-term human progress, safety, or knowledge.

A programmer churning out another food-delivery app makes massive money because it generates quick profits and optimizes ad clicks. A nuclear scientist working on reactor safety research that might prevent catastrophes 30 years from now? The market sees that as a too-long, too-uncertain investment horizon.

From a market perspective, the scientist is inefficient. From the perspective of civilization? The programmer is moving deck chairs while the scientist is trying to keep the ship from sinking.

What capitalism naturally rewards:

Instant gratification
Attention capture
Viral appeal
Short-term ROI
Entertainment value

What actually matters:

Fundamental research
Long-term safety
Knowledge creation
Energy security
Medical breakthroughs

The economics of attention

We live in what economists call an “attention economy.” Attention is the scarcest resource, and influencers with plastic surgery and Botox are incredibly good at capturing and monetizing attention. Scientists doing fundamental research? They’re boring, incomprehensible to the average person and impossible to go viral.

So capitalism assigns them subsistence wages.

This isn’t a personal failure of scientists or society’s lack of appreciation; the economy is optimizing for what humans find immediately stimulating, not what our civilization actually needs. That’s not evil, it’s just how incentives work.

The lost geniuses we’ll never know about

Here’s what keeps economists awake at night: we have no idea how much human potential we’re wasting.

Everyone knows about Einstein, Marie Curie, Richard Feynman, but that’s survivor bias on a civilizational scale. These people are famous because they were born at the right time, in the right place, with access to the right institutions and funding. They had the luck to be discovered. ⁴

For every Einstein who made it, there were probably a hundred equally brilliant minds who:

Were born in a country without scientific infrastructure
Couldn’t afford education, even though they had the intellect for it
Were the wrong gender at the wrong time in history
Lived in a region where their talents were economically worthless
Got stuck in survival mode working three jobs and never had time to think deeply
Made one wrong career choice at age 18 and never recovered
Died before the field they would have revolutionized even existed

The physicist working for poverty wages at a nuclear research center might have been the person to solve fusion energy. The brilliant mathematician driving for Uber might have cracked a fundamental problem in computational theory, but they never got the chance.

Talent and luck are deeply intertwined in capitalism. Most people who become famous scientists didn’t just work hard, they also had parents who could afford to feed them while they studied, lived near a good university, went to schools that taught them proper fundamentals, had mentors who believed in them, got hired by the right lab at the right moment, had their breakthrough at a time when funding was available, and had their work recognized by influential peers.

Remove any one of these luck factors, and they might have been unknown.

Capitalism seems to fail catastrophically at recognizing that most of the brilliant people who could have mattered never got the chance to try. Success requires luck as much as talent, but we celebrate the successful as if they earned it alone, blinding ourselves to all the equally talented people who didn’t get lucky.