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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: Let me suggest some counter-points about the pro- or anti-capitalism:
    1. Capitalism, in my view, has existed long before the modern version of capitalism. For example if a person had a skill or talent like an artist or musician or an architect, even someone having good business sense, he would gain wealth and power under even the feudal system whenever their talent was appreciated by those in power. Even without too much of a monetary system, an excellent craftsman can demand lot of money OR other commodity OR real estate in exchange for his "products" The only difference from then and now is the tremendous improvement of media communication as well as the industrial productivity.
    2. It seems to me that the switch from the feudal system to the modern democracy had only a chaotic buffer zone, that is rather poignant, such as the French revolution and the communism under Stalin and Mao. The communist regimes claimed the wealth redistribution with complete destruction of capitalism. However, the results, put in a simplistic term, turns out to have all poor people and nothing else.
    3. The continuation of emperors by family inheritance was similar to a random drawing of a "ruler", but the system produced, at best, a 50-50 chance of a good or bad rulers.
    4. In comparing the livelihood of the "poor" in the past and now' from an objective view, I think the current poor are still a little better than before. More precisely there were still concentration of wealth in a precious few under the feudal system anyway.
    5. The government structure of a democracy should be strictly adhere to the initial Constitution, with shorter term limits. The 2 major parties should occupy one quarter each of the congressional seats, and at lease 30% of the seats should be allotted to independent candidates nominated by the voters in each state. Any amendment to the Constitution should be approved by 90% of all the states. Any change in tax rates should be approved by super majority in congress.
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      Mar 18 2013: Bart, you have good points. If I may, address a few that I believe could be tweaked.
      I am not sure how the change of the two parties in congress on a timely basis would create the stability you address. I see not much difference in the 2 major parties as we have. The self described fringe elements are the only definable differences between the two. Further I am not sure there would be 30% of independents available. Most Americans are committed to the banners of the 2 major parties.
      I think that a 67% approval rate is sufficient to amend the constitution. A higher rate could be more difficult to get any agreement. The last amendment passed was first proposed as the 11th amendment in the bill of rights. That's 200 years ago. I understand we have a number of proposed amendments still pending ratification. I have no problem with a tax to support the Federal Government, but the 16th amendment is an open check. CJSCOTUS pointed that out last year when the Healthcare bill was passed. We need a fairly proportioned tax, but the tax should be sufficient to operate a Federal Government. It was not intended to fund every hair brained idea that could be conjectured no matter how noble it was painted to be.
      The Federal Government is the most wasteful in the expensing of funds. That is why I have proposed limiting the scope of the Federal government to just those tasks specifically addressed in the constitution and to relook/repeal all the programs the Feds have taken on.
      • Mar 18 2013: Mike, I had read your previous comment on the limitation of the structure of the Federal government.. I fully support the limiting government functions and spending, but in my opinion, the limiting of the government structure can never be completed if we are in grid lock and the Congress is monopolized by the two major parties. For example the Democratic Party are unilaterally increasing the bureaus or sub-agencies under each of the departments even when you restrict the number of departments. So if the Congress is consisted of subgroups of independents, then it can restrict even such sneaky attacks by the administration or a single party by cutting off the funding of any such expansion. This unique weapon with the congress was really the very correct stipulation in the constitution. However, the majority party and the president could skirt this congressional power by passing no budgets, and also by illegal recess appointments which is now in court fight.
        The election of the congressional members can be done by by cutting back the number of congressional districts and add on a number of at-large members from statewide nomination with a loosened minimum endorsement requirement for the independent candidates.
        We can use any other methods for such structural composition in the congress. But the important point is that we should definitely crack the two-party rule so that there could be less gridlock and monopoly (duopoly?) of this important constitutional function and intent.
    • Mar 22 2013: 1) It seems we have devolved back to a feudal system, albeit global and without boundaries. The "Lords of the Forbes List" have an aristocratic hold on political bodies, no different than in the past.
      2) I like the Parliamentary System where you vote locally, the party with the most seats is in control, unless not majority and need to form a coalition government. The party selects the leader, but if within 6 years, he or she gets a no confidence vote, then new elections are held and quickly.
      3) Profoundly said earns a TED Cred

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