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Luke Hutchison

TED Fellow,

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 23 2013: The topic at hand is: "Is capitalism sustainable?" I think we ought to keep that in mind as we go. I am talking to myself as much as anyone else. I think we tend to lose focus and get lost in larger issues.

    I think that capitalism is sustainable. My question is:

    If not capitalism, then what system is sustainable?

    To those who don't like capitalism, or seriously believe that it can not be sustained, and want to replace it with a system along the lines of communism, I have asked the questions:

    Why would we choose to replace a flawed system with one that has failed?
    How would we put this system in place?
    Woul;d we be willing to use force to do so?
    Where do we find the altruists who can cary this out without becoming like thos "greedy capitalists"?
    I would also like to know why the political and economic interest of socialists and communists is somehow superior to that of capitalists?

    I have yet to get an answer.
    • Mar 25 2013: Mike, James,
      I agree with you heartily. May I offer a few comments about the problems of those comments that trashes the capitalism, but offer only some vague suggestions about "fair and just" economic system. We already know that pure communism did not fare well. Mmoreover, the original communism based their theory on the principle pf workers (proletariat) revolution, but as I stated in my previous discussion, the future of our economy will base more on capitalism and less on manual labor. So the basic thesis of Communism no longer applies.
      I have also carefully observed the economic situation in Europe. Briefly there are two categories. The first one consisted of the southern European countries. where the governments follow the so-called tax and welfare spending in order to achieve the "economically fair and just society". And we all know that it didn't work, and the chaos is contagious from Greece and now to Cyprus. On he other side there are Sweden, Germany and Switzerland, they also are with capitalism, They are working satisfactorily. Why the difference? In my opinion, the difference is that the citizens in these latter countries have the proper attitude that if they are capable of working to contribute to the society, they would rather work than sit back and receive the welfare payment from the government. Therefore a real almost "fair and just society" has been achieved.
      In economic sense, the society can't sustain itself if its economy only depends on a few citizens to work hard and produce commodity for the consumption of all, it usually falls short if majority of the citizens are idle and live on lavish welfare as in Southern European countries Of course, The government policy influences partially to this INEQUALITY. Welfare is not a dirty word if it is only used for the citizens in need but can't work because of age or disability, but it is not good when the government uses it to pay the able bodied citizens simply for the votes in the election.
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        Mar 25 2013: It is fair to note that the countries you mentioned, the ones that are doing well, also actually have measurable production of products and services. They are also taxed at high rates, and are edging away from elected socialism to the right as time goes on. Your examples are slightly Germanic, you could add Norway and Denmark, and for a little ballance throw in Ireland which has managed to stay the course and seems to be returning to a vibrant economy.
        • Mar 25 2013: James,
          I believe that you misunderstood my comment about the "tax and spending" problem in Europe. As a matter of fact, I really didn't criticize high tax per se since the Germanic countries do have high taxes for the expense in welfare support. However, I was objecting to the high debt by overspending on welfare like that in Greece, say. More precisely, using debt building AND high tax to pay welfare which is used to discourage citizens from seeking work or from their desire to improve education in technology in qualifying them to work and earn a good living. So that this "government stimulus" from high tax receipt does not increase the productivity, thus does not contribute to the economic improvement. Then this "tax and spending" caused heavy debt becomes a negative in the cost-benefit equation. I omitted Norway, because its natural energy resources serves as a buffer for its welfare payments, and Denmark is also a Germanic country, isn't it? The 3 countries I mentioned are among the largest capitalistic ones in Europe. So excuse me for my sins of omission. :-)
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        Mar 25 2013: I understood Bart, just throwing some more info into the pot. I actually agree. It is the productive places that are doing well. I would like to see tak rates go down, everywhere, especially mine! :)

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