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Luke Hutchison

TED Fellow, Google

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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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  • Mar 2 2013: The issue is not capitalism, the issue is that the rich and powerful tilt the system in their favor. Proper capitalism requires that no single person or company has enough wealth to manipulate the system - i.e. bribe officials, buy out the competition, fix prices, pay the $100,000 because they're making $1,000,000 breaking the law, etc. Not that the level of wealth has to be perfectly equal, but there has to be a relatively equal level and there has to be constant movement of money I think. There also is some incentive in wanting money, and there's nothing wrong with that - as long as you remember to be more generous as you gather more wealth. As much as I appreciate people who give away millions of dollars, if that's still only 1% of your income or if you have enough money to keep you wealthy for 5 lifetimes, that's not being generous enough.

    I expect there will always be people who are "rich" and people who are "poor" but I think what Bono is mainly saying is that people don't have to be destitute anymore, and he is right I think. There's also more involved than just flat out economics I think.
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      Mar 2 2013: I think you got it right. Simplistically, capitalism is one who invests his "capital" in a manner to make a profit with the knowledge that he may not make a profit and could lose his investment. And many do.
      The problem as you point out is when cheating is going on. There seems to be a lot of that. So called crony capitalism, bribery (aka campaign contributions), to many more to list, and the worse part is that even when exposed, it is not punished.
      The morality of being charitable, I don't think can be or should be measured. If a wealthy man only gives a small percentage away, I can not say that it is enough or not enough. I am not the one to make moral judgments. Although, I will admit that I am most pleased when I hear of a generous donation to a cause I favor.
      • Mar 3 2013: I am not much for measuring specific numbers either despite what I said, but I do believe in being generous in accordance with how much money you have. This is the moral principle that I was getting at.

        I think there is a distinct difference between pointing out what should be done and going up to someone and saying "Hey you, you're not doing it right".
    • Mar 3 2013: Andrew, Capitalism IS about money tilting systems one way or the other. You are arguing for the continuance of this biased, closed-loop exchange of money in the upper reaches of Marx's "commanding heights" any time you support Big C Capitalism.

      Do not bother dragging morality into the conversation, for there is nowhere to measure it on your balance sheet. Cheating is also a relative term, not measureable in the capitalist system. Ponzi and Madoff were financial geniuses until they got caught. The current "investigations" (stage show) into the too-big-to hold-accountable-to-any-laws corporate giants are a marker for the end times of the Capitalist Agenda. We are in the Randian dream of complete societal control by an oligarchial elite; the spigot is almost in place on the Fountainhead.

      Monsanto wants a monopoly on food, so we are giving it to them. Bechtel is buying the water rights to the third world. And the IMF and World Bank continue to mandate destruction of native ecosystem as the ticket for inclusion to the new world economy, despite any local sentiment otherwise. And you guys want to think it is a handful of bad actors?

      The Capitalist system is governed by a good book; unfortunately it is The Prince, and absolute power is going to be awfully hard to overcome as it is, without all this talk about how at least the trains run on time...
      Like religion we find inconvenient, we start relabeling the parts of our scipture we find distasteful. ALL capitalism is crony capitalism at some level, most trades are inside trades (if done by any financial institution). The key tenet to the religion at question is "money rules". Moral dilemma? See rule one. Ethical question? See rule one. This is not a sustainable model, as no unjust system ever is, but a lot of money will fight to hold onto it as long as possible. And as long as capital creates a commanding height, there will be a fight for that real estate. We must create more parity in capital to acieve social justice
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        Mar 3 2013: capitalizing words does not constitute an argument. "money tilting system" is a meaningless term. you are so far away from understanding how the economy works, it is painful to watch
        • Mar 14 2013: Witnessing the world's most eminent economists all scratching their heads wondering what to do next, is painful to watch.
          It would appear, to me, that there are only two types of economists. The first one knows it is all a con and the other pretends to know what he is talking about, like the emperors new clothing.
          As others have commented, capitalism is the problem not the solution. It is a system that encourages bad behaviour. We don't legislate against good behaviour it's for all the bad.
      • Mar 3 2013: The fact that people corrupted what grew out of the pure seed does not mean that the seed is not pure.

        Capitalism in America is pretty messed up, it is systemically messed up all over the world even, but once you start to understand capitalism as it was intended before people started screwing with it for their own benefit you will see that in of itself it is a good idea.

        Every good idea has been corrupted or misunderstood at some point or another. It's just part of the standard of living in this world. You have to get good at seeing what is pure and hanging onto those individual parts of systems and ideas. Most people don't learn that though I think because most people don't ever grow up and start questioning their assumptions and using honest logic. It is way to easy to use blinders to see the world.

        Edit:
        All across human understanding you run into two ideas: something that is posited, which either means assumed to exist or describes something the way it should be, and normative, which is how it actually is. So basically what is going on is I am talking about positive capitalism and you are talking about normative capitalism. It's an important distinction to draw I think.

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