TED Conversations

This conversation is closed.

What should the New Deal be like?

We are living in an age where 1% of the population have 30% of the wealth, and as those plutocrats grasp that wealth tightly and give their sons and daughters every opportunity to follow their own paths, they turn into aristocrats and so the system goes on. I don't say the government has to cut the incentives and collect equal amount of tax from the "biggies". Taxation already differs for those biggies contributing to economic growth. But on the other side of the coin there are those who can't make the ends meet. Minimum wages are just above the poverty line. So, how is it possible to solve the problem of excessive inequality in income distribution? What can be done to implement the necessities of being a social state?


Showing single comment thread. View the full conversation.

  • Sep 25 2013: We all know that socialism does not work because it lacks flexibility and incentive due to central control. It does however create, albeit low, even distribution of wealth.

    While capitalism is better because it is flexible and creates incentives it also has an ugly side. Capitalism has two massive problems – it creates boom and bust cycles and extreme uneven distribution of wealth.

    So, there must be a midpoint between socialism and capitalism that extracts the best of both. What we need is the free markets that are driven by the profit incentive while distributing the wealth more evenly among citizens.

    To receive the benefit of a capitalist business you must be one of two things: an employee or a shareholder. Clearly if you are looking at wide income distribution the employee is bad model because a business can only employ a tiny proportion of the population. Therefore jobs are a bad way to even up income distribution.

    However shareholders could be almost unlimited; especially if their shareholding is managed by a fund manager. Therefore an economic model that focuses on people becoming shareholders of capitalist businesses could act as distribution model where all participate in the wealth created.

    A fund which is a variation of a “Sovereign Wealth Fund” could invest on behalf of all citizens at a rate that they contributed to the fund. For example at 9% of income. The compounding effect of such investing could even out the uneven distribution in approximately 50 years.
    • thumb
      Sep 25 2013: points that i would debate:

      1. even distribution is not a valuable thing.
      2. capitalism does not create boom and bust cycles. fractional reserve banking does.
      3. there is no stable midpoint between socialism and capitalism. it is instable and tends toward socialism.
      4. "a business can only employ a tiny proportion of the population" does not seem to make sense. majority of the population is employed.
      5. having shares also mean taking risks. not everyone wants to bear risks.

Showing single comment thread. View the full conversation.