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Luke Hutchison

TED Fellow, Google

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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    Mar 18 2013: It depends on what we mean by sustainable. Capitalism itself just refers to people being free to trade amongst themselves. Even in the worst market failures those transactions can still go on. Peoples lives are worse, but capitalism doesn't end when it fails to deliver prosperity. Will the divide between rich and poor bring an end to capitalism? I doubt it. The poor can still trade what little they have and the rich do like to spend money (after all, why be rich and live in a tent?). Bankers can cheat, markets can collapse, giant corporations can go bankrupt, but capitalism lives on.

    The only thing that can end capitalism is a totalitarian regime that prevents people from trading amongst themselves. Can that happen? Well its possible, and perhaps more likely when the masses feel exploited by big business. Discontent gives the would be tyrants fuel for their propaganda. If that outcome is inevitable, then capitalism is unsustainable.

    What's unsustainable is what we have been getting from capitalism. Our economy is unsustainable, even if capitalism is not. In a pure free market society free of all regulation, business would catch every last fish in the sea, cut down every tree in the forest, pollute every river, and burn every last drop of oil.

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