You're correct, but you're already dealing with already successful people. Capitalism is just a fancy word for everyday life. It starts at the level of the block and the neighborhood you live in. Some person gets an idea for something, doesn't even have to be a business, it can be an Elks club or anything else. From the POV of economic development, businesses are the most important thing that gets started. It could be a retail store, a warehouse, a contract manufacturer, a craftsman. In a healthy neighborhood, you could easily wind up with all of these and more. One of these businesses will "blow up", not in the sense of going bankrupt, which is how most of them will end up, but in the sense of being very successful, and going far beyond the place where it got started. You're dealing already with those guys. That's already a few levels higher than what counts for the future: what happens at a very local level. Big cities are just large agglomerations of lots of active neighborhoods with lots of economic and cultural and religious and every other sort of activity. Some of the folks doing all these things will be wildly successful. They wind up being the capitalists. In northern Italy, if you look at all the small city-states that emerged during the Renaissance, the successful ones both had very successful businessmen and very successful folks in other areas, Florence being the prime example, but you could also look at the history of Siena, which was at its peak just before Florence took off. Just like Florence, it had not just very successful businessmen, but famous artists as well. If everyday life in a place offers people the opportunity to flourish at whatever their talent is, that place will be successful. If not, not. It really is that simple. Northern Italy, even today, is still economically vibrant, although these days Milan is the big center. Think about that: it's been something like 800 years since Siena was the center, but northern Italy is still going strong. Economists and politicians think you have to "preserve" the middle class, but that's not it: successful cities create new middle classes all the time from the people who migrate to them looking for work. What's wrong isn't what you think: what's wrong is that development funds are distributed according to Congressional district, when if you really wanted to promote the economy, you'd send the money to where the people have an already demonstrated ability to put it to good use. Reagan was good, but not for the reason even he thought. What happened was that by flattening tax rates in 1986, he allowed the folks living in the huge metro areas who actually mostly make the big bucks that get taxed at the high rates to put their money to work. There has to be some progressivity just as a matter of fairness - even Adam Smith thought so - but you have to be careful how steep you make the curve so you don't suppress and distort economic activity. As far as I can tell, no one really understood that lesson. Everyone's too busy taking the extreme positions, trying to prove how ideologically pure they are. Like that matters.