This paper aims to theoretically and empirically analyze the causes of low growth and polarization in the Korean economy. The paper argues that the essential function of the market is “economic differentiation,” which is a differential selection function based on economic performance and creates the motivation for economic development. However, in the capitalist economy, the organization called corporation was invented to supplement and strengthen the insufficient differentiation function of the actual market due to incomplete information, and proactively practices the economic differentiation function, and the government actively provides policies and institutions to encourage this differentiation function of the market and corporations, thanks to which the economic stagnation of the agricultural society was overcome, and high-level economic development became possible. According to this theory, corporations are the key players that lead the growth and distribution of the capitalist economy, and the fundamental proposition of the capitalist economy is that the growth of corporations can improve economic growth and distribution. The paper tested this hypothesis on the Korean economy based on the author(Jwa)’s previous works that tested this hypothesis on the world economy and the US economy. It was confirmed that the phenomenon of low growth and polarization is caused not by the corporate economy but by the government’s anti-corporate policy and welfare state-redistribution policy that runs counter to the principle of economic differentiation. The claim of domestic and foreign critics of capitalism that economic inequality is the responsibility of companies and the market has not been supported.