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Luke Hutchison

TED Fellow,

TEDCRED 50+

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Is capitalism sustainable?

Bono stated in his TED2013 talk that the numbers show that we can eradicate all poverty worldwide by 2030. While I really hope that is true, it begs the question: Is capitalism sustainable? Is it possible to have a rich and middle class without a poor class? The sad reality of capitalism is that if there is an exponentially small number of people with exponentially large wealth, there has to be an exponentially long tail of much poorer people who are each contributing to that wealth. Not that we necessarily need an exponentially small number of people with exponentially large wealth, but would the world keep running without capitalistic incentives that increase the separation between rich and poor? Can we eradicate all poverty without the rich sharing their riches? What happens to civilization when nobody is willing to work in the factories and orchards, or build roads?

(Please don't take this question the wrong way! Personally I wish that nobody had to work menial jobs. I just don't understand how we can eradicate poverty when so many jobs will always translate into low-paid labor.)

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    Feb 27 2013: It seems to me that the question you are posing Luke (and really glad you turned our short exchange in the chat room into this conversation) has more to do with equality and the distribution of wealth, rather than the eradication of poverty. I doubt anybody would dispute that factories, farms (and plumbing!) will always be needed, despite various technological breakthroughs (even though the number of hours we have to toil in them might decrease). Poverty is always relative. Income disparity – the distance between those who sweat on a farm and those who work in a lab or a bank – is not.

    This distance, especially in the western world, has increased expotentially over the last few decades. In 1968 CEO of GM took home about 66 times the amount paid to a typical GM worker; today the CEO of Wall Mart earns 900 times the wages of his average employee. The wealth of Wal-Mart founders ($90 bln) is estimated at about the same as the bottom 40 % of the US population (120 mln people). To me, this seems unsustainable. Nathan Garfinkle („The Gospel of Wealth”) and late Tony Judt („Ill Fares the Land”) are among my favorite authors who have written about the issue perceptively, discussing how it correlates with all sorts of social problems (mental illness, crime, corruption, health problems, etc).

    In plainer terms, one could say that it is the question of dignity, and hope. If someone toiling in a factory or on a farm, feels his work is not being appreciated (and it is hard to feel otherwise if your income is so miniscule relative to someone working in a bank let’s say), and if they feel there is no prospect of their children „moving up” something is bound to happen... Or not?

    Capitalism and free market have a lot of potential for self-correction? One would want to think, that with a system of checks and balances they can work well (create possibilities for people to move up)? Or is it wishful thinking? (I also love dr Sivaram Hariharan’s liver/glycogen comparison!)

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