show me the incentives
capitalism doesn’t care about your values. it cares about what you're willing to pay for.
If one more anti-capitalist tells me capitalism is broken, I’m going to lose it.
Capitalism is the most powerful coordination system humans have ever invented. But it doesn’t know right from wrong. It’s a machine. It just rewards what it’s told to reward. If something’s failing, it’s not because capitalism ignored it — it’s because the incentives were wrong.
You want walkable neighborhoods and cute cafés? Then support them. I joke that every morning latte and pastry I buy is a vote. But it’s not really a joke. Money is the only ballot capitalism counts.
Well-intentioned systems fail all the time. Not because people didn’t care, but because no one was rewarded to make it work.
Exhibit A: Public Transit
In America, we treat public transit like a public good and then underfund it like a public nuisance. The people building it don’t get rewarded for making the train faster, cleaner, or more reliable. So they don’t. And we sit in traffic reading op-eds about why high-speed rail is “politically complicated.”
Now take the Hong Kong MTR (Mass Transit Railway) system. Widely regarded as one of the best transit systems in the world, it runs not just efficiently, but profitably.
How? The MTR doesn’t just operate trains. It also owns the land around its stations, and profits from the rise in real estate value it helps create. When transit access drives up nearby property values, the MTR captures that upside through long-term leases, commercial property, and residential development. In 2024, only 30%1 of MTR Corporation’s revenue came from transit-related businesses.
This is the Rail + Property2 model: better transit raises land value, which boosts MTR’s bottom line, which funds more transit. A self-reinforcing loop. They built a system that makes rail infrastructure financially viable.
It works because it’s insulated from politics.
Budgets shift. Priorities change. If a transit system depends on annual subsidies and public goodwill, it will always be vulnerable. That is what’s happening in cities like New York and D.C., where projects stall under politically charged budget fights and NIMBY protests.
The MTR was set up differently. They were founded in 1975 under British colonial rule as a government-owned but commercially run corporation. It later went public with the government still owning controlling shares today. The British had seen what political interference did to the London Underground and learned from their mistake.
From day one, the MTR had a mandate: be financially self-sustaining. They don’t just assess existing neighborhoods and wait for profitable routes to appear. It makes them profitable by building up the land around new stations. Every expansion comes with a development plan — retail, housing, offices, public third spaces—not a request for public funding. In doing so, they’ve created new economic hubs from scratch. They stand up entire neighborhoods by developing the physical, economic, and social infrastructure needed to make them thrive.
They’re landlords with a rail empire. While they provide a vital public service, they keep building transit because it is lucrative to do so.
Exhibit B: Romanticized Farmcore
Farming in America is romanticized. It’s portrayed as noble, patriotic, salt-of-the-earth work. And in many ways, it is. But the flip side of that narrative is we treat farming as if it’s above the rules of business. There’s a cultural discomfort with the idea that farming might be, and should be, a capitalistic endeavor.
It’s a strange contradiction. We cheer for small farms, shop at farmers markets, and post about “knowing where your food comes from.” But when a farmer starts to scale, invest in tech, or corporatize, people get suspicious. As if it’s somehow more virtuous when it’s not profitable.
This thinking has split agriculture into two parallel realities:
On one side, you have the Cargills, Tysons, and Wonderful. These corporations treat farming as the industrial machine it is. They vertically integrate, scale aggressively and print money while doing it.
On the other side are the people we like to imagine when we think of “real farmers”. These small to mid-sized operations, often family-run, are scraping by on razor-thin margins. Many rely on government subsidies. They’re hit hardest by price shocks, droughts, and market volatility. And yet we still expect them to feed the country, steward the land, uphold the ideals of rural America while keeping prices low.
If they try to do right by the environment or their community — better labor practices, soil health, diversified crops— they’re seen as idealists.
There’s a kind of anti-capitalist filter applied to American agriculture: we want it wholesome, but we don’t want to pay for it. We want farmers to save the planet, but not make a living doing it.
Farming isn’t charity. It’s a business.
We need to stop treating sustainability like a nonprofit side project and start treating it like a business strategy. If stewardship isn’t profitable, it doesn’t scale. And if it doesn’t scale, we’re just romanticizing our environment, our land, our food systems into bankruptcy.
Exhibit C: Grocery Stores Price Gouging?
The public loves to blame grocery stores for rising food prices. It makes sense. They’re the most visible part of the food system. The average person doesn’t track fertilizer prices or Avian flu outbreaks, but they do see $7 eggs at checkout. So the logic becomes: price is up, the store must be raking in cash.
But that’s not how the economics work.
The average consumer believes that grocery stores earn over 30% net profit3. This is simply untrue. Most independent grocers and regional chains operate on razor-thin margins — typically 1–2%. It’s one of the most brutally competitive, low-margin industries in the world. Yes, some national chains have earned strong profits during inflationary periods4, but those gains are usually from scale and logistics efficiency, not a coordinated markup scheme to price gouge you on pork.
People expect a lot. They want $3 organic produce, plastic-free packaging5, better wages for workers, local sourcing, sustainable and climate-friendly practices— and all at low prices.
Something has to give.
You can’t demand higher wages and lower prices without something breaking. Profit margins are what help businesses weather volatility. Squeeze them too far, and you're not fighting corporate greed, you’re pushing the system closer to collapse. And when it collapses, everyone loses.
This isn’t a blanket defense of grocery conglomerates. There’s real consolidation and inefficiency at the top. And when too much power gets concentrated, markets stop being competitive. But we need to be honest about the math. If the cost of inputs goes up — labor, transport, ingredients — so does the cost of outputs.
We’ve built an economy where people expect to get everything and expect someone else to pay for it. The cost just gets outsourced: the underpaid night stocker, the drought-stricken almond grower, the river downstream from the feedlot, the unseen factory worker halfway across the world.
Capitalism is doing exactly what it was designed to: reward what people actually pay for, not what they say they care about.
And yes, not everyone can afford to vote with their dollars. For people just getting by, price is the primary constraint. That’s real. But for those who do have some economic agency, who want better outcomes and a more ethical food system you can’t escape the fact that incentives are upstream from everything.
—
Capitalism isn't a moral system. It’s a mirror. It reflects what we collectively value. Not what we say we value, but what we’re willing to pay for.
That’s why we need a more imaginative, optimistic approach to capitalism. One that treats incentives as infrastructure, and profit as a signal. Profit isn’t the enemy. It’s the proof that things are working. A system that generates profit is a system that sustains itself.
The real threat isn’t capitalism. It’s when capitalism stops being competitive. When monopolies win so big they no longer have to play. Capitalism only works when markets are allowed to function — openly, efficiently, and competitively.
Everyone wants “systems change” until it means paying fair prices. But that’s the only way this works.
Want better labor standards? Pay more. Want local food? Pay more. Want your city to have subways that work and a food system that doesn’t exploit people? Then reward the players making that happen. If you don’t, don’t act surprised when they disappear.
Capitalism can be a positive-sum game. The best systems are the ones where doing the right thing also happens to be the profitable thing. If something is broken — transit, farming, climate, whatever — it’s not because capitalism failed. It’s because we failed to make the right outcomes profitable.
The future isn’t anti-capitalist. It belongs to people who understand that incentives run the world and know how to align them with their mission.
Further Reading
Poor Charlie’s Almanack - A collection of Charlie Munger's talks and interviews. He coined the phrase “Show me the incentives, and I'll show you the outcome”
How Hong Kong built the world’s most valuable subway. A great breakdown on how Hong Kong’s mass transit system works and one of the inspirations behind writing this piece.
the lost charisma of capitalism from moth fund. “Capitalism is designed to equip charismatic individuals who want to transform the world into a better place with the resources they need to do so.”
A Kingdom from Dust - A story about the family behind Wonderful (you’ve seen them before — the pistachios, the pomegranate juice…), the biggest farmer in the United States. They invested in people and uplifted communities but neglected the land. They are capitalism at its most effective and most extractive.
America, the Beautiful - Founder letter on how Ambrook is helping family-run farms become more profitable and resilient.
Radical Markets — A look at how rethinking property rights, voting systems, and data ownership could realign incentives to serve the public good without abandoning capitalism.
Farms and other F words — A great takedown of the family farm myth, arguing that romanticizing small farms distracts from the structural reforms agriculture actually needs. One of the first books I read when I started working in ag.
The Great Grocery Squeeze — how policy changes transformed a once-competitive grocery industry into an anti-competitive one, pushing out independent grocers and creating the modern “food desert” in under fifty years.
This likely bot-generated exaggerated tweet on capitalism that went viral on the extreme end of the pro-capitalism internet discourse.
As always, these views are mine and there is more nuance in this than I had time to dig into in this piece.
From Supermarket News. U.S. grocery shoppers wildly overestimate how much profit their grocery stores make.
But even then, many grocery stores don’t increase prices when they are making a loss in inflationary periods because they are afraid of losing market share.
Plastic isn’t the answer to everything but in grocery stores, it’s often the lesser evil. It keeps produce from rotting, which reduces food waste, a major source of emissions. Wrap it in plastic = longer shelf life, less waste. Leave it loose = looks better, rots faster, gets trashed. It’s counterintuitive, but sometimes plastic is the more climate-friendly option.