What do you think are the largest differences between how economics works in theory and how it works in reality?

I don't want to sound like another anti-capitalist but I'm doing some reading of Smith, Hayek, Keynes, and Ricardo and it seems like there's a massive disconnect between what's written in the textbooks and how economics seems to function in reality.<br><br>Some of the largest differences I notice:<br><br>Democratically elected governments seem to have a much larger impact on the economy than any of the classical liberals/Keynesians ever imagined. There's this weird idea in economics that governments are somehow separate from the economy and a free and fair market can function perfectly well without any government intervention, but in reality governments are inextricably linked with the economy and seem to have a massive impact on the day to day functioning of the economy. To me it seems crazy that any of these economists could imagine that a government could function without needing to tax its citizens and that a government could tax its citizens without having a large impact on the economy. Why do we still teach this shit? Why does this idea still persist when it's so patently obviously wrong in practice?<br><br>Not all people have Perfect information. Not only do not all people have access to the same information, but the information people do have is often shoddy, biased, out of date, or contradictory. Again this is so obviously wrong that it's absurd, but there's still all these theories based on the idea that everyone has access to all the information and can make decisions based off that, but in reality that's hardly ever true.<br><br>It seems like the way markets and capitalism function in general is a lot more unstable than any of these guys could have imagined, with constant cycles between booms and depressions and companies going bankrupt, massive income inequality. This all seems to heavily contradict the idea of markets self-regulating and this self-regulation leading to economic growth. All these economists claimed that free markets were the most efficient way to organize production but in practice they seem to be a lot more unstable than say for example a centrally planned economy.<br><br>And lastly, the major theories of economics seem to ignore the fact that corporations generally completely dominate markets. This idea of small businesses being able to compete with larger corporations seems to be completely unfounded in reality. It's like all these economists imagined some sort of perfect market with an infinite number of companies competing with each other, but in reality most markets are dominated by a handful of very large corporations. These large corporations generally have a lot more power than governments or individual people and it seems like most of these economists failed to account for this concentration of power.<br><br>Any thoughts?<br><br>EDIT: I apologize if I came off as overly critical of capitalism and these economists. It's not my intention to bash the capitalist system, I just see these disconnects and want to open up a discussion about them.