I’ve spent years inside markets without seriously asking a basic question:

Who actually invented capitalism?

The more I looked at it, the less it felt like a human invention – and the more it started to resemble something else entirely:

Not a machine we designed.

An ecosystem we grew into.

That realisation changed how I see markets, wealth, and my own role as a fund manager.

No Architect, Only Survivors

We like clean stories: someone had an idea, designed a system, and now we all live in it.

Capitalism doesn’t work like that.

Markets, contracts, property rights, wage labour, limited companies, banks, stock exchanges – none of these came from a single mind. They emerged over centuries, collided, reinforced each other, and slowly produced the environment we now call “the economy”.

Nobody sat down and wrote:

“Let’s build a global, self-optimising capital allocation machine.”

Yet that’s what we ended up with.

That’s exactly how evolution works.

Markets as Environments, Firms as Organisms

Once you start mapping capitalism onto evolution, the parallels are hard to unsee.

In biological evolution:

  • Organisms try to survive and reproduce.
  • The environment rewards or punishes traits.
  • Fitness is measured in offspring.

In capitalism:

  • Firms, strategies, and products play the role of organisms.
  • The market environment (laws, technology, culture, interest rates) rewards or punishes different behaviours.
  • Fitness is measured in profit, survival, and access to capital.

You can line the pieces up almost one-to-one:

  • Mutation → new business models, financial products, technologies
  • Recombination → mergers, copying competitors’ ideas, hybrids
  • Natural selection → bankruptcy, takeovers, being priced out
  • Genetic drift / luck → right place, right time, right cycle
  • Niches → small, defendable markets where specialists survive
  • Extinction events → crises, regulation changes, technological shocks

We often talk about “innovative companies” and “disruptive products”. In evolutionary terms, these are just new mutations entering the gene pool.

If they improve fitness, they spread.

If they don’t, they die.

Why Capitalism Feels “Designed” From the Inside

From the inside, capitalism feels like a tightly engineered system:

  • Property law protects capital.
  • Limited liability encourages risk-taking.
  • Accounting standards make firms legible.
  • Central banks stabilise the background conditions.
  • Markets move capital, in size, with frightening efficiency.

As a fund manager, you see how cleanly incentives line up. Good capital structures get rewarded. Bad ones get punished. Stupidity is expensive. The whole thing looks like a closed, deliberate design.

But that’s the same illusion we get with biology.

Life looks “designed” because:

  • every clumsy, non-viable configuration was already eliminated,
  • and we only ever see the survivors.

Capitalism works the same way:

  • For every dominant company you see on an index chart, there are thousands of failed experiments.
  • For every “obvious” business model, there are countless variants that quietly went bankrupt.

What’s left on the surface – the part we interact with – is the tiny visible slice of an enormous selection process.

It looks tidy because the chaos has already been filtered out.

The System Reinforces Itself

Evolution doesn’t just select organisms; organisms reshape the environment.

Forests change the climate and soil they grow in. Coral builds the reef it depends on.

Capitalism has the same feedback loop.

Successful firms don’t just survive inside the rules:

  • They lobby for regulations that suit them.
  • They standardise technologies and platforms others must use.
  • They influence culture, taste, and even language.

Over time, winners partially rewrite the environment to favour strategies like theirs.

That creates the “closed” feeling many people have:

  • Winners shape the rules.
  • The rules favour behaviours that look like the current winners.
  • New entrants have to adapt to that environment first, then innovate.

From far enough away, it’s an ecosystem. From close up, it feels like a locked system with no obvious way out.

The One Big Difference from Biology

There is, however, a crucial difference between biological evolution and capitalism.

Evolution is blind. It has no memory, no model, no ethics.

Capitalism is blind at the selection level – profit and survival are mechanical – but the agents inside it are not.

Humans can:

  • build models of the system,
  • anticipate second- and third-order effects,
  • choose goals beyond “maximise short-term fitness”.

In other words:

  • A bird cannot decide to redesign evolution.
  • A person can decide to use capitalism in a particular way.

That doesn’t mean we can simply “switch off” the system. But it does mean individual participants can:

  • choose what they optimise for,
  • decide which strategies they are willing to run,
  • and use capital in ways that reflect their values, not just their fear.

We’re still organisms in an environment – but we’re organisms that can understand the environment’s source code.

What This Lens Changes for Me as an Investor

Seeing capitalism as an evolutionary system shifts a few things in my head.

1. I stop looking for perfection. I look for robustness.

In evolution, there is no perfect organism. There are only organisms that are good enough for this environment, right now.

In markets, there is no perfect company.

There are companies that:

  • survive different cycles,
  • generate cash under a range of conditions,
  • adapt rather than snap when the environment shifts.

I care less about “the best” and more about “hard to kill”.

2. I respect path dependence

Evolution is path dependent. You can’t just jump from fish to bird in one step. You get strange intermediates, constraints, leftovers.

Businesses are the same.

The current structure, culture, and capital allocation decisions of a firm are not arbitrary; they’re the residue of its survival path.

That matters when you ask:

  • “Can this company realistically become something else?”
  • “Is this business structurally capable of using new opportunities, or is it locked in?”

3. I pay attention to selection pressure, not just stories

Every narrative in markets sits on top of a set of selection pressures:

  • interest rates
  • regulatory regimes
  • demographics
  • technology costs
  • cultural norms

When those pressures move, what looks like “good strategy” can flip quickly.

Thinking evolutionarily keeps me asking:

“What traits is the environment really rewarding now? And what if that changes?”

How This Helps Outside of Investing

This perspective doesn’t just apply to portfolios; it leaks into how I view my own life.

  • Careers behave like species in a changing climate. Some environments favour certain skill-sets; others don’t.
  • Cities and countries act like ecosystems with different niches and selection pressures.
  • Habits and routines are micro-strategies that either survive in your life or get eliminated by reality.

Seeing all this as evolution softens the self-blame.

If something doesn’t work – a role, a business, a relationship to work – it’s not always because you are defective. Sometimes the environment changed, and what used to be fit no longer is.

The useful question becomes:

“Given the environment I’m actually in, what traits and behaviours would survive and compound here?”

Living Inside the System, With Eyes Open

Capitalism wasn’t invented the way a car or a computer was. It grew.

It’s an emergent, evolutionary system that:

  • allocates capital using profit as fitness,
  • ruthlessly selects against fragile or stupid strategies,
  • and lets winners reshape the environment that shaped them.

From the inside, it feels almost over-designed. From the outside, it looks like a survivor of a long, brutal selection process.

For me, the practical takeaway is simple:

  • I don’t romanticise markets.
  • I don’t demonise them either.
  • I treat them like weather and ecosystems: real, powerful, and indifferent.

Inside that, I still get to choose:

  • what I optimise for,
  • which strategies I run,
  • and how much of my life I’m willing to trade for marginal gains.

Evolution doesn’t care.

Capitalism doesn’t care.

But I do – and that’s the only part of the system I actually get to design.