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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 18 2013: Not being a very good student of history myself, I have big gaps in understanding the critical junctures that made Capitalism a good idea in the past. Just another thing not taught in school. For me, in a nutshell,

    1. A growing merchant class in imperialist countries wanted feudal lords to relinquish some of their power, by convincing them philosophically that they stood to control most means of production anyway in a merchant-based economy and things like the Invisible Hand and meritocracy will be adequate explanations for the masses' own responsibility of their lots in life.

    2. The invention of America, the litmus for #1 proved true for a splashy, loud few. As well, freedom and democracy were concepts mixed with Capitalism as 'all good'.

    3. The most educated countries, also the colonialist countries saw their exploited working population decline and a middle class grow, giving the perception that things have worked out with Capitalsm.

    4. After the World Wars and with no real natural need to consume at the rate we do, Madison Ave execs invented advertising. To his day, we routinely see the polished aspirational end image or products we think we need and routinely ignore externalized costs of manufacturing them.

    5. Oh, and the invention of consumer credit--to perpetuate the perception that we can still afford all this.

    So, in total, most drawbacks of Capitalism have just been externalized outside of former imperialist countries --making it a going concern in the richest, loudest, most connected, -educated and -media savvy countries. We don't calculate the waste, the debt etc. The math remains that there is a finite amount of resources and a finite amount of money (?) and if some billionaires own most things, then some people, like you said, will necessarily have almost nothing.

    Though 2030 as the eradication date of poverty is reasonable--it's the year in which most of today's billionaires will have died, and their resources donated or redistributed.
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      Mar 18 2013: Just curious about something: How was this merchant class developing and growing if there was not some basic free marlet tendency already present?
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        Mar 18 2013: I think it's prevalent the world over, the tendency to buy, sell and profit. No dispute there.

        Maybe the merchants of those times were tired of lords favouring certain merchants over others (?) or making random restrictions. I'm sure the lords / kings' excuse would have been that if it were not for their say so on all matters, society would fall apart. That's when the argument for a 'natural law' of sorts, Invisible Hand etc. would have come in to change their minds. Backed by great thinkers and academics, perhaps this is how it got ushered in!
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          Mar 18 2013: I figure that the "advent of capitalism" was the first time someone decided to trade a rabit hide for a giant cluster of grapes or something of that nature. That it has always existed in one form or another even under the most serious communist governments, for those at the top, and those at the bottom through the black market. There is really no other system, except a central power saying: "Bring everything you earn to us and we will distribute it to all evenly". We may be headed to that today. It is the equal distribution of poverty.
        • Mar 19 2013: Oh come on James, thats really lazy.

          Trading rabbits for grapes is not capitalism in any shape or form, nor is international barter of ships for oil.. Capitalism is "An economic and political system in which a country's trade and industry are controlled by private owners for profit"

          Apart from Communism (which did, and does still work pretty well by the way) there are lots of other economic systems. New Guinea, Hundreds of thousands of tribal people all over the world have operated all over the world on non - Capitalist principles and even more remarkable on non-Technical principles. Most of these systems have outlived Capitalisms 200 year history by an order or two of magnitude. Co-operatives (yes, collective self interest but still not capitalism) operate many of the systems INSIDE capitalism.

          OK, I agree that many of these systems do not offer you Apple Pie in sufficient super abundance to support mass obesity - but that is not the point. The point is there are many viable and more sustainable alternatives. I've just named/ grouped several hundred. Must I go on?
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          Mar 19 2013: Alan: So, are you saying that capitalism did not exist until it was given that name? Come on Alan!

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