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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 24 2013: Perhaps the architecture of capitalism makes it easy for the rich to get richer. And as the rich get richer, and control a larger portion of the economy -- because our country lives or dies off its economy -- it becomes easier for the rich to manipulate politics and the law, and -- not coincidentally -- the policies they enact end up speeding up trends of income inequality even more. Marx said capitalism always ends in monopoly. Maybe it's more like capitalism always ends in stratification, but how far can stratification go? A recent slew of articles have come out declaring income inequality "permanent." Not good news. And it's only getting worse, but what happens when employers don't properly compensate their workers for their labor is that they the general public can no longer afford the products made for them.

    The 1950's were the happiest economic decade in American history, and the top marginal tax rate was 91%. In 1914, world class son-of-a-bitch Henry Ford looked out at his workers and thought, "What if they could buy my cars?" He then offered $5 wages ($120 today.) The best mechanics flocked to Ford and training costs were reduced. Studies have shown that after a certain point, consuming more does not make you happier. So when the rich are sitting on these pools of money and the common man is scraping the floor to get by, the only way for the economy to fundamentally function is for rich people to spend and consume more than could possibly make them happy. In a world full of suffering poor people, I just don't think that's just.

    Capitalism CAN be sustainable, I really believe that, but only when well regulated by laws and incentives that take the environment and the entire populous into into account.
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      Mar 24 2013: Capitalism may always end in monopoly as Marx stated, but so does any other human system. Of all the ratty systems that man has devised, capitalism still offers the best chance for the largest numbers of people to escape poverty.
      • Mar 25 2013: I totally agree, Capitalism rewards those who work and gives incentives to those who don't.
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          Mar 25 2013: I do not believe in anything that passively punishes. We incentivize our children to "work hard," but we have a narrow view of "working hard." What of men who work hard to cultivate their hearts and not their wallets? What of men who, with open arms, accept the mantra, "I will take advantage of others to become rich?" What, then, when they reach their desired destination, are they rich in but greed and green pieces of paper?

          Perhaps your assertion should be revised: capitalism rewards those who work to become wealthy and gives incentives to those who don't. The principle here seems to be: wealth is the pinnacle. I feel a true sadness for the men who set -- and reach that goal -- to find it only cold and empty.

          I am an Athiest. My religion is truth; but I can say with relative confidence that capitalism is idolatry.
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      Mar 25 2013: Mr. Hall,
      You are almost correct, but close only counts in horseshoes. Capitalism is self correcting in it's very nature. It's those who abuse it who need the the regulation. And all those rich world class son of a bitches you described
      do not sit on money, the only rich people who did that was Jack Benny and Scrooge McDuck.

      And surprisingly, all those rich folks do take the environment and the entire population into account. The entire population are their customers, the other half of the sale, the customer, the contract. And sometimes whether we like it or not, those customers will ask for a contract to provide them with... stuff from the environment, like gas and oil..
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        Mar 25 2013: I am a human being. I pity you if you consider yourself a customer.

        One of the reasons the American Medical Association lobbied against the first New Deal was that they did not want regulators overseeing the shady practices of doctors. Capitalism paves avenues for the selfish and hides tunnels for the selfless. The string-pullers of the money market began deregulating the financial regulatory framework we put in place after the Great Depression to SAFEGUARD against ANOTHER depression around 1970. That deconstruction was complete in the 1990's with the repeal of the Glass-Steagall act, which effectively separated commercial and investment banks. With it gone, they intermingled again... fifteen years down the road: the worst economic downturn since the great depression. All of this was orchestrated, choreographed and performed by the so-called "one percent."

        The point is, the saturation of capitalism from "ambitious startup" in colonial America to "global religion" has given us an expectation that capitalism is the way things are. It is the pinnacle. When, in history, has a people not thought what they had was the pinnacle, and when -- except in rare instances (See: Jesus Christ, Muhammad, Mahatma Gandhi) -- were these people, in retrospect, not written off as naive or shortsighted?

        Life is not a game of numbers. Capitalism is a game of numbers. I finish with two quotes. "It is no measure of health to be well-adjusted to a profoundly sick society." That's Jiddu Krishnamurti -- and, "Society exists only as a mental concept; in the real world, there are only individuals." Oscar Wilde said that. It's true.
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          Mar 26 2013: I am at a loss, What has anything you've written address the economic system being discussed. The concept of capitalism goes back to the earliest days of mankind gathering into villages and dividing up the tasks needed for the village to survive. And I believe Capitalism is sustainable as long as people stop trying to "fix" it.
          You are defending the Progressive Political Babble that came from an elitist academic fringe that managed to influence the Roosevelt s and Wilson among others. Let me give you an old reference: Plato already thought it up 2500 years ago, it was only a theory then and a bad idea now.
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        Mar 26 2013: Can you please explain how capitalism is self-correcting? I'm sorry. I'm afraid I just don't understand.
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      Mar 26 2013: Well said.
      I wouldn't insult Henry Ford's mother though :) I don't think he was aware of the impact of the labour system in his company. The impact on the life of the workers in it, I mean. He just wanted to make cars. On the other hand, somebody should make him aware of that.

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