The Capitalist Dilemma: Who Gets the Cream?

Capitalism isn’t the problem. The problem is how the game is played and who sets the rules. In any system, the key question is: who is getting the cream? Profits should be the reward for innovation, efficiency, and superior outcomes, but too often, they are extracted through gatekeeping, monopolization, and exploitation. Unrestricted capitalism—where market forces operate without checks—inevitably leads to monopolies, inefficiencies, and profiteering at the expense of outcomes. That’s not innovation; that’s exploitation. The challenge isn’t about choosing between capitalism and something else—it’s about structuring capitalism so that it delivers what it promises: better outcomes, efficiency, and progress.

Some industries thrive under a profit-driven system. Others, particularly those providing essential services like healthcare and energy, struggle when the motive shifts from delivering outcomes to maximizing margins. This is the capitalist dilemma: when is profit an incentive for innovation, and when is it a mechanism for unnecessary gatekeeping?

Necessary Cream: Where Capitalism Drives Innovation

Profit, when correctly structured, fuels progress. Pharmaceutical R&D, for example, depends on long-term investment, high-risk trials, and the promise of substantial returns. Without profit incentives, we wouldn’t see the rapid development of vaccines, new treatments for chronic illnesses, or advancements in AI-driven diagnostics. Companies take risks, invest billions, and push the boundaries of what’s possible because the rewards are high. And that’s a good thing—when the system is balanced.

Similarly, in the energy sector, capitalism has driven massive advancements in renewables. Solar, wind, and battery storage have become viable alternatives because of private investment, competition, and technological breakthroughs. Without profit as a motivator, these industries wouldn’t have scaled at the pace they have. The key is that these profits are tied to outcomes—better energy efficiency, lower costs over time, and reduced environmental impact. Google, for example, deserved the cream—it built a superior search engine that revolutionized access to information.

Exploitative Cream: When the System Rewards the Wrong Players

But then there’s the other side of the equation. The part where profits are extracted not from value creation, but from bottlenecks, inefficiencies, and artificial barriers to access. The U.S. healthcare system is the perfect example of this.

Insurance companies act as intermediaries, dictating which treatments are covered, which medications are accessible, and which doctors a patient can see. Not because this improves patient outcomes, but because it allows them to skim profits from every transaction. Pharmacy Benefit Managers (PBMs) exist not to make drugs cheaper but to manipulate pricing in ways that favor themselves. Hospital pricing is opaque by design—patients have no clue what a procedure will cost until they receive a bill riddled with incomprehensible fees. This isn’t capitalism working as intended; it’s a rigged game where those who control access extract the most wealth. The cream pools at the top, and those who need it most get the scraps.

The same dynamic plays out in the labor market. Many businesses, from Walmart to gig economy platforms, pay workers the lowest possible wages, not because they can’t afford better pay, but because squeezing labor costs maximizes the cream at the top. Some even exploit welfare loopholes, paying so little that employees qualify for government assistance, effectively outsourcing their wage obligations to taxpayers. In contrast, countries with strong worker protections, like Norway and Japan, see better outcomes for lower costs while still fostering competitive markets.

Monopolies: The Inevitable Outcome of Unchecked Capitalism

The real issue isn’t capitalism—it’s unrestricted capitalism. Without rules, capitalism trends toward monopoly. The logic is simple: companies that succeed don’t just compete; they consolidate, acquire competitors, and build barriers to entry.

In theory, competition should drive better products, lower prices, and improved services. But without intervention, industries naturally consolidate until competition disappears. The U.S. healthcare system is a prime example. Five major insurers control the market. Three PBMs dictate drug pricing. Hospital networks consolidate until patients have no real choice. What was once a competitive market turns into a closed-loop system where prices can rise unchecked. The system ensures that the cream flows only to the select few who own the infrastructure.

The same pattern plays out in energy. Utility companies often operate as regional monopolies, controlling both generation and distribution. Renewable energy, which should reduce costs for consumers, gets entangled in regulatory red tape and legacy infrastructure that slows adoption. The game isn’t about delivering cheap, efficient power—it’s about maintaining control over how it’s sold.

Rewriting the Rules: What Needs to Change?

The solution isn’t to abandon capitalism but to adjust the rules so that it serves people, not just profits. There are three core areas that need reform:

1. Aligning Profit with Outcomes
   In healthcare, providers should be rewarded for improving patient health, not for how many procedures they perform or how well they negotiate insurance rates. Value-based care models attempt this, but until middlemen like insurers and PBMs are held accountable, profits will remain disconnected from patient outcomes. Countries that separate health from employment, like Japan and Norway, consistently deliver better results for less money.
2. Breaking Up Monopolies
   Monopolies aren’t a sign of a healthy market; they’re a sign that competition has failed. In both healthcare and energy, breaking up industry-dominating players would allow smaller, more agile companies to compete on efficiency, price, and service.
3. Regulating Access, Not Just Pricing
   Price caps alone don’t solve the issue. If the underlying structure allows for artificial scarcity, companies will find ways to extract profits elsewhere. The focus should be on ensuring access—whether that means forcing insurers to cover all necessary treatments, mandating transparent hospital pricing, or requiring energy companies to prioritize affordability and sustainability over shareholder dividends.

The Endgame: Capitalism That Works for People

The goal of capitalism should be to drive better outcomes, not just to maximize profits for those who control the system. The best innovations in healthcare and energy come from competition, risk-taking, and smart investment. The worst inefficiencies come from industry consolidation, regulatory capture, and artificial barriers to entry.

Profit is necessary—but only when it serves a purpose. If the rules of the game reward efficiency, innovation, and real value creation, capitalism can thrive without distorting essential services. But if the system continues to favor those who control access rather than those who improve outcomes, we’ll keep seeing a world where the cream doesn’t rise to the top—it just sits in the hands of those who own the churn.

It’s not about rejecting capitalism. It’s about rewriting the rules so that it delivers what it should: innovation where it matters, efficiency where it’s needed, and fairness where it counts.