I disagree with the idea that capitalism is a mechanism to optimize production. In early days, capitalism did contribute to increased production- for example,

I disagree with the idea that capitalism is a mechanism to optimize production. In early days, capitalism did contribute to increased production- for example, the role it played in removing the crown's ability to grant monopolies in different fields to favorable subjects, and allowing private ownership at all. Early monopolies and their place-men held back economic development, and allowing anyone who sees a new need to start a business definitely increased production, but Capitalism is governance by the owners of capital. At this point, that is again holding back production, as capital owners (like the place men before them) incentives' are to increase their personal wealth even at the expense of production. We see capitalism inhibiting production most clearly in the way private equity consumes and destroys productive enterprises by loading them with debt, using the money to issue enormous dividends payable to the special class of shares held by the firm, and then selling the scraps of the company that remain after bankruptcy. This is also visible in the way that banks no longer offer loans to new businesses unless they have collateral to borrow against, and the flaws in how venture/angel investment works. When optimizing for production, governments turn to policies that are considered socialist in order to remove these obstacles. One category of this is stuff like social housing and free education/healthcare which reduce the cost of living for workers, increasing the size of a country's workforce and allowing cheap production of goods & services. Unemployment benefits and support for non-workers (like children and the disabled) also fall into this category, as that allows workers to change employers with less friction. Other ways are limiting what owners of capital are allowed to do with their property- a prohibition on the Private Equity model of destroying companies would fall into this category, or subsidizing immature industry. There is a balance between capitalist policies and state-controlled policies, where either side can inhibit production once it has power without responsibility to the citizens it operates on.