The economy, back when it was on a gold standard so that the money supply was more constant, tended to show a strong boom-bust cycle. The bust would lead to ban

The economy, back when it was on a gold standard so that the money supply was more constant, tended to show a strong boom-bust cycle. The bust would lead to bankruptcies and unemployment. I'm not sure if this counts as "working perfectly" or not. These days, central banks flood the economy with money if there's the slightest hint of anything going wrong, so that interest rates have persistently tended to zero and even below. A capitalist economy is based on government intervention, in any case. They provide all the enforcement of contracts and property rights, and do some wealth redistribution, especially helping people who can't survive from what the market provides. Without the latter, it seems inevitable that the system devolves into a few winners and many losers, and such a system will eventually be overthrown by the losers.