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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 8 2013: RE: Is capitalism sustainable?

    Which capitalism is sustainable? Wikipedia lists the following long list of capitalisms:

    Mercantilism, Free-market capitalism, Social-market economy, State capitalism, Corporate capitalism, Mixed economy capitalism, Anarcho-capitalism, Crony capitalism, Finance capitalism, Financial capitalism, Late capitalism, Neo-capitalism, Post-capitalism, Technocapitalism, Plutonomycapitalism, and Welfare capitalism.

    And, I would go so far as to add: Quantitatively-Eased capitalism, Private equity indebted capitalism, and Multinational corporate capitalism that under presidential executive order on Private-Public Partnership Act that sold control of US assets to the multinationals.

    So, which one are you using as the basis of this discussion?

    Over the last 30 years, big business has so intervened in government, to get government to intervene in business, to the advantage of the politically influential business over its competition and consumers, that it has already formed a plutonomy at the expense of the middle class, and an elite group of bankers who can do no wrong in their strive for fraud, knowing they will never be prosecuted.
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      Mar 8 2013: Let's apply the KISS principal. I like the program as defined by Alfred Smith all those years ago. All the variations you've list are simply outside influences trying to get a bite out of the capitalist apple... pardon the metaphor.
      Yes, there are individuals and governments and and and who try to get control of capitalists efforts for their benefit. Yes, there are frauds, con men, white crime practitioners. They simply strengthen my convictions about capital punishment.
      So, do we throw out the baby with the bath water? No. The people still have the vote, maybe not for long, but they can limit terms, add elected officials to bribery laws, petition for prosecution. If they will
      • Mar 8 2013: Your answer about throwing the baby out with the bath water ignores the fact that here has been a fundamental change in what was considered your Alfred Smith type traditional capitalism. Now, one has to question whether the hired management, who rig the business for bigger short-term compensation for themselves and their management team, have more control over the business than do the stockholders who own it and get stuck holding the losses when management's short-term efforts turn south. And when it does, management walks away with wealthy golden parachutes and leave everyone else to suffer for the greed of short-term profits.

        I can speak from experience as both a former GOP common councilman, who was elected during the Reagan administration, and as a retired marketing communications manager/art director for some of the leading corporations in their industries. The unwanted influence by business that I experienced as a common councilman ran counter to my efforts as a marketing manager for companies that benefited from government spending. So I experienced both sides of the scenario. Business intervening in government is good only within limits. All this intervention in government by business, either by socially based businesses, or by conservative and military based businesses, create such competition for government funds and regulations that benefit them, that we have reached a point where all this competition has stalemated congress. Many of our regulating agencies, like the SEC, are no longer effective at their basic function because of the intervention of the very businesses they are supposed to regulate. The financial crash of 2008 is a perfect example of this.

        I am not saying to throw captialism out, but rather to get back to the fundamentals that made it great. However, the question was, is it sustainable. The answer is, will it destroy itself in its evolution?
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          Mar 8 2013: You have addressed the problem. People have gotten into the system and turned it into their own feeding trough. Further, these same people have brought in politicians to help their cause.
          All true.
          So, simplistically, we have two choices.
          We can scrap capitalism and turn to any number of systems that are basically the same... one man or a small group tells everyone how to live, how to work and how to die. Surprisingly, a popular solution, if I read these conversations correctly.
          Or,
          Stockholders and voters can resume to do "due diligence" and throw the bums out, if not in jail. A simple solution, but surprisingly seemingly hard to do.
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      Mar 8 2013: the question asked this way is answered by ludwig von mises long ago. he concluded that any combination of central interventions and free market economy is unstable. interventions always have unwanted side effects which make other interventions necessary, and so on. you either have a free market, or you have central control. any other solution is temporary, and gravitates toward one extreme. sadly, usually gravitates to the central control side.
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        Mar 15 2013: There are OBVIOUS flaws in this 'reasoning' I am surprised you cannot see them!
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        Mar 15 2013: Think 'premis'. Question 'premis' . Then maybe you can see the flaw.

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