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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 21 2013: Mike,
    Good comment. I agree with you 100% when you state that, ""To be at the service of a few be it 99% or 1% is still to be in the service of...."", but there is a vast difference between "service" and "co-operation!"

    When men come together and form a society there is a certain level of co-operation that is required for any society to work. I need not, I'm sure, write a big long list of the ways that we all benefit by co-operation. You will already know what I mean, and have had the advantage of such co-operation, from personal experience.

    Let us understand that an economic system is supposed to serve a society and the individuals in that society. Otherwise, why have either one? Certain kinds of economic systems serve certain needs. Unfettered capitalism may - I make no claim of this - may serve a society well at certain times in its development. This does NOT mean that it will serve the society well in other circumstances. My impression is that it seems a great way to develop a society when it is starting from scratch and when all people in that society truly have relatively equal opportunities to take advantage of its unique characteristics.

    However, there comes a time when unfettered capitalism becomes a bane on society; where it no longer serves the needs of that society or the majnority of its individuals. It is that time which is upon us presently. It is now up to us to design a social system and an economic system that will serve us as they should.

    Offered here is a short explanation of what that next step in our social and economic systems might look like. I make no claim that my concept of social participation by choosing social managers by lot, or my concept of "Citizens' Capitalism" as an economic improvement, are perfect or that they'll magically bring utopia.

    What I tried to show is that it IS possible to design an alternate CAPITALIST system, and an alternate social system. If mine doesn't suit you, I'd love to see other (your?) designs.
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      Mar 22 2013: Fair enough. What I think might be more fair. I like a basic capitalistic economic system. Free markets if you will, but I would like contract law to be enforced. Both parties to a contract get what they contract for. I think that the US can best function as a Constitutional Republic. Our original constitution was pretty well written. I would like to start back at the beginning. Why? Because over the last 200 years, the US has been plagued by professional politicians who by their own admission or actions came to the conclusion that they were smarter and better administrators of the law. The nations was only a few years old when the Federalist began chipping away at the Law and began to consolidate power into the central government. A hundred years later, The Washington elite decided that they were the smartest of all and should provide for those not so fortunate. Some good things happened, but not all... and they were provided at the cost of some liberties. The next hundred years more good things have happened and at the cost of more liberties. Until today, when they have wrapped Americans in a swaddling blanket and try to care for us from cradle to grave. A good number of Americans have accepted these conditions from our federal benefactors, a few of us more rebellious types don't desire to have everything done for us or to us.

      So, it is proposed that the federal government be return to it's original state. That it be tasked to do only those duties as specifically defined in the original constitution. All other tasks, programs, policies and procedures be reviewed and only those supported by 2/3 of the sovereign states be continued. That the 17th Amendment be repealed. That congressmen be limited as the president to two terms. The cabinet would be reduced to 7 Secretariats. That lobbying be considered as bribery. That the 16th Amendment be rewritten to be only a flat tax rate of 10%. It's biblical.

      Those are a few of my favorite things.
      • Mar 22 2013: Mike,
        I can understand your thinking. I followed much the same line of thought about 30 years ago. Further thought and observation led me to think that we just do not have the ability to "return to them thar good ol' days" of lore. Why not? Because that is exactly what they were - days of lore - and did not ever really exist.

        But even if they had existed, the grand opportunities that were extent then do not exist today. In those days so much needed doing that there was never any question that production (of goods or services) was required by the society, that we didn't need to pay any attention to the consumption side of the capitalist balance of production with consumption. We were playing catch-up to consumption for hundreds of years. But our capacity to produce has become so great now that our whole economic system has oriented itself to "playing with the economic system" as a means of amassing wealth. We are no longer securely tied to production as we once were.

        The problem arises when we realize that we ARE still tied to consumption though. We NEED things. We NEED services. We are a growing population facing reductions in our traditional way of sharing the wealth we produce. Automation has still only scratched the surface of our ability to produce. As it increases - and it WILL certainly increase because it's is just simply cheaper than human labour - then in order for people to play their role as consumers, we'll need to assure them of an income so they can do that.

        This means that our traditional means of providing income to our population has to re-designed away from "employment" and towards some other means of wealth sharing or distribution.

        Reversing progress to "go back" to another time is fruitless. Putting band-aid patches on this particular form of capitalism is, as we can easily see, not working either. We have no real option; we MUST subdue our economic system or we will fall into socialistic "government of everything." A damned shame I think
      • Mar 22 2013: Mike,
        Here is a short blog that you ought to read. I suggest that you read the author's short bio before reading it so that you know where he is coming from. Comments by Skypixiezero are mine.
        http://open.salon.com/blog/ted_frier/2013/03/21/greed_not_so_good

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