Funny, I think that you believe what you do without evidence primarily due to the propaganda spread by the wealthy elite that own and control the system and want to deflect blame for serious problems away from themselves by blaming the government.

The private sector is bigger than the public sector, both in terms of dollar expenditure and in terms of political power. Politicians have to be vetted by rich people (the campaign finance process) before they are even options for election. If you're wealthy enough to monetize policy changes, it's easy to lobby with positive net expected value, if not, it isn't. The whims of the wealthy are in the driver's seat, the will of the people is not.

Quick exercise. Many people are confused about the social class they inhabit. Tax policy is the easiest way to demonstrate the actual reality, because whoever is in charge always decides that someone else should pay the taxes. Take out last year's 1040. I want you to look at 3 lines: Line 1, what you earn from working, Line 7, what you earn from owning assets, and Line 9+3/4, your unrealized capital gains. Line 1 has high tax, Line 7 has low tax, and Line 9+3/4 has no tax. Who do you think decided these tax levels? Populists? Do you feel in charge here?

> markets do what is most efficient and optimal given the rules

Markets don't maximize value in the colloquial sense, the value that they optimize is wealth-weighted. Feed a starving orphan? Zero market value because the orphan has no wealth to pay you. Merge up all the banks so they can load up on risk and arrange for bailouts when they go bust? Enormous market value because it makes rich investors richer, the single most weighted value in all the world. The market will ejaculate capital and connections all over this brilliant value-creating enterprise. Oh, and part of it will involve bribing public officials so you can even blame the government for allowing you to rob the plebs. Lol.

Ok, so the markets don't do what people want, they do what wealth-weighted people want. What rich people want. Is that so bad? You and I still get enough weight in the process to live a decent life. Besides, Warren Buffet seems pretty humble and someone has to be diligent about the high level investment decisions, right? Well, here's the problem: financial assets are a moral hazard. Cynically, capitalism entitles rich people to get paid for being rich. Passive income is the ultimate luxury, the most valuable commodity, and rich people indulge exorbitantly. Even Warren Buffet. Especially Warren Buffet. When his passive income streams are threatened, the happy investment grandpa turns into a nasty selfish asshole out to bust the balls of the people doing the real work at the companies he owns (seriously, look into the terms of the BNSF negotiations) because on the opposite side of a passive stream is (arguably) a stream of unreciprocated labor. The counterargument is that Labor Theory of Value is clearly bunk because there's more to value than labor, but just as clearly there is moral hazard in letting someone who doesn't produce the surplus value decide what to do with the surplus value. Wouldn't they just stuff it in their pockets? Yes. That's literally what the stock market is. The entire private sector is organized explicitly for the purpose of stuffing pockets and everything else is merely an emergent consequence of that.

Maybe that's ok. After all, every contract is individually agreed to, right? Problem: one side gets much more control over the rules of the game than the other, so consent is dubious. On the first day of business school they teach the prisoner's dilemma, where freedom to control the rules of a game trumps freedom to choose inside of a game. In theory, competition keeps businesses is check, but in practice businesses do everything they can to avoid competition, some successfully, so does it really?

In any case, every system needs investment and investment is all about reducing consumption today (which rich people are in a unique position to do) in order to spend the money instead on a factory or a risky venture or something that is expected to make the world better tomorrow, returning a cut to the investor, rewarding success and punishing failure. This is good for everyone, right? Well, yes... when it plays out that way. But markets are amoral. They don't really know if you created value or extracted value and they don't care. The money in your pocket doesn't care if you are a highway robber or robber baron or someone who worked hard for that money. As far as markets are concerned, "create problem, sell solution" is just as legitimate an enterprise as solving an actual preexisting problem. Better, even, because fundamental value creation is hard and you have to compete, while monopolization is all about not competing. What do the best performing market sectors over the last few decades have in common (health care, housing, and education)? Monopolized scarcity. Is this really best for society? You notice how business school tends to focus less on building a better product and more on building a better moat? They know what they are doing, and while it's the best strategy for them, is this really the best way to run society? By maximizing free money for the rich and observing that a somewhat functional society springs up as a side effect?

Capitalism is great at growth and terrible at stewardship. It wins a land grab but it leaves behind a nasty class structure. Is it worth it? I have no idea. I just try to win. I'm a lot less certain than I used to be, though.