How to Improve Capitalism

How to Improve Capitalism

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It’s clear capitalism doesn’t work very well at the moment but most of us feel there isn’t anything to be done we’re stuck with it because there’s just no alternative That’s nonsense there are plenty of good workable suggestion for reform and here are four of them We have to bear in mind that capitalism isn’t just one thing There are almost as many varieties of capitalism as there are capitalist countries There are american, german, singaporean, swedish, danish, korean versions of the thing The differences include the sizes of the welfare state from around 10% of GDP in Korea to over 30% in Finland The importance of state-owned enterprises producing less than 1% of GDP in the US But 22% of GDP in Singapore And the power of trade unions, with nearly 70% of workers unionized in Norway and only about 10% in the US. Capitalism has got dials and we can adjust them Think that Sweden, that supposedly high-tax-addicted country only introduced income tax in 1932 two decades after the U.S. and nearly a century after Britain Or remember that the US, that pro-the-rich place today had a top income tax rate of 91% between 1915 and 1963 and it didn’t do them much harm at all so we don’t have to chug capitalism in a bin the trick is to tweak and reform it in intelligent ways When people hear of options to adjust capitalism for the benefit of all they tend to think that sounds beautiful but in the end the ‘free-est’ variety that you find in the US will ultimately outcompete the others because it’s just superior the argument goes like this: the US variety maximizes growth by minimizing the constraints on wealth creation which creates higher inequality but in the end makes everyone better-off in absolute terms than under a more equal but less dynamic system but if you look at facts it’s overwhelmingly not true that the freer varieties of capitalism grow faster From 1955 to 1980, the time when regulations were much stricter, The world economy grew 2.6% per year For the next 30 years, the heyday of neoliberal economics it grew at only 1.3% In its miracle growth periods between 1958 and 1982 Japan, Korea and Taiwan had governments hell-bent on dictating business activities and it worked rather well for them. Contrary to the popular belief, that a large welfare state is bad for economic growth, Finland, with the welfare state 1.5 times bigger than that of the US, 30% of GDP as against of 20% has grown faster than the US with an average annual per-capita income growth rate of 2.7% for the last 40 years against 2% in the US A well designed welfare state with integral retraining and redeployment programs promotes, rather than deters growth Importantly, when people feel secure they take risks which is the life part of capitalism “Secured people dare” as the old slogan of the swedish social democratic party used to go Unlike what some economists like to tell us it doesn’t have to be a hard choice between security and stagnation on the one hand and perilous insecurity and economic dynamism on the other It isn’t some inevitable natural phenomenon You sometimes hear that CEOs need to have huge paybacks or they won’t deliver the goods but data consistently shows no relationship between a rising executive pay and executive performance Then there is the claim that we redistributing wealth impoverishes everyone but some of the most productive and wealthy countries in the world redistribute avidly Before redistribution throught the tax system Germany in 2011 was a far more unequal country than the US Germany’s G.I.N.I.’s coefficient, an indicator of income inequality in which zero means absolute equality and 1 means absolute inequality was at 0.51, higher than in the US, where it was 0.50 But after redistributive taxes Germany’s G.I.N.I. coefficient fell to 0.29 while the US, with a far more elite-friendly tax system saw its G.I.N.I coefficient fall to only 0.38 Moreover, countries can limit the very ability of the market to generate inequality through formal regulations or informal business practices South Korea, for example, has by far the lowest rate of inequality in the developed world with a G.I.N.I. coefficient of just 0.34 But this didn’t come about by magic rather because the country has lots of regulations protecting some pretty nice things like organics farms, and small shops, especially bakeries and bookshops And it has laws that keep CEO compensation low by international standards All this preventing the full manifestation of the inequalizing tendencies of an unfettered market In other words, inequality is not the result of uncontrollable forces, like technology or international trade There are lots of tools that a society can use in order to reduce it and a lot of the wealthiest and most dynamic countries are using them very wisely indeed already The rise of the financial industry is a blight on capitalism making it unstable, unequal and very short-termist For example, in the 1960s if an investor bought a share on a company in the UK they held on to it for an average of 5 years By the mid-2000s the number had fallen to a mere 7 months Faced with the radically diminishing patience of their investors companies have done a host of nasty things to make investors happy right now at the expense of the long term They suppress wages squeeze suppliers and chug back profit at shareholders, rather than reinvesting Between 1950 and 1970, the hundred largest US corporations retained 65% of their profits every year But by the 200s, they were retaining a mere 6% vastly diminishing their own abilities to invest for a properly succesful future It’s actually rather easy to encourage long-term-oriented investment you just need to give greater voting rights and tax advantages to long-term shareholders and you need to have sovereign wealth funds and national pension funds representatives of the long term collective interests using their considerable financial power to back long-term-oriented corporate behavior Above all, mergers and acquisitions need to be made more difficult as is the threat of these that typically pushes managers towards actions that please fecal short term investors All these schemes may seem like pipe dreams but they’re far more tantalizing than this They’re real possibilities, alive in certain favored enlightened corners of the globe right now There is no need to give up on capitalism We just need to understand it a little better and stand up to arguments that bully us into accepting its worst versions.

100 comments

  1. "Capitalism has got dials and we can adjust them" Ahmm WRONG! Capitalism does not have dials, that goes contrary to the very ideals of capitalism. The cornerstone of capitalism is the free market, if it has deals that some elitist or government can adjust, then it no longer is a free market and therefore is no longer capitalism!

    Almost everything presented in this video is wrong, using selective data and a misunderstanding of what real wealth growth is.

    Let's take the example of germany. After ww2 germany decided to go down the capitalism, free market route and became as a consequence the wealthiest and most stable economy in europe, unemployment was low and worker satisfaction was very high. Germany only started playing with regulation and wealth redistribution in the last decade or so. And they will pay for it. This is in contrast to every other european country especially the UK, who implemented heavy regulations, wealth redistribution and state production exactly what this video is saying is a good idea. As a consequence the UK severely diminished its wealth generation capacity, unemployment was high, poverty was high and worker satisfaction was low. Until margaret thatcher came along and brought the UK back from the brink of destruction using the "god awful Laissez-faire neo-liberalist" ideals, which weirdly enough seemed to work. Which is exactly what germany did after ww2 and made them so rich.

    The thing is, state spending will grow the GDP of a country, but it's an illusion, no real wealth has been generated, THE GOVERNMENT CAN NOT GENERATE WEALTH! One of the reasons for this is that the equation used to calculate GDP includes government spending as one of its variables. In Fact the inventor of GDP, Simon Kuznets, warned the government of this exact limitation. A warning that every government in the world went on to ignore.

  2. . Basically all of the points in this video can be disproved with just Trickle Down Economics and The Laffer Curve.
    If taxes become too high then people with alot of $$$ will go live somewhere else, which could lead to less revenue overall.
    Another more likely possibility is that business won't make as much profit, which at best would make small businesses hire less people, causing the unemployment rate to increase, and at worst make it so that only very large business can afford to stay open. If the worst possibility happens it could be catostrothic, because if that happens then the big business can charge whatever they want because there'd be no competition.
    Something else you haven't thought of was that having some rich people can help everyone else. For example when cellphones were first invented they were so expensive that only the richest of the rich could buy one, but because some very wealthy people bought them they eventually became cheaper and better, and now anyone can buy one.

    To sum it up, you're wrong and you should feel bad.

  3. If you ask me, you would want ideally a "capitalism without consequences", whereby corporations can still work in a competitive market with each other, but all individuals are not, whereby, ideally the government pays for their expenses within their abilities, paying for the services and goods the corporations provide according to their overall usefulness, providing a direct incentive to corporations to provide useful things. This would theoretically allow a free market to push progress forwards with the government pay based incentive to regulate it, whilst letting individuals live high standard, happy lives.
    This however puts a lot of power in the hands of the government, and such a system would need to be incredibly transparent and democratic to avoid corruption.

  4. The more you learn about economics and politics, the more clearly you can see this video is all about politics and has nothing to do economics.

  5. 91% income tax rate? How did people survive?

    Wait, don't answer that. I don't want to hear rationalizations. The point is I already don't want to work, so at least let me keep my money when I do

  6. I appreciate the constructive criticism of capitalism, rational conversation is important in any free society. I do believe he is picking which facts to represent and that the issue is far more complex then is made out to be. This video should be taken as a launching point for research and not used in debate.

  7. I mean just change what is necessary and keep what is good. Capitalism has its goods and flaws, and it is not purely black and white. Just find what needs improvement and make progression, and should you call it capitalism, democratic-socialism, liberalism, communism, Hogwartz, whatever that the people like, it doesn't matter.

  8. He is doing what, well, what everybody else does: deciding what's best. Germany is very nice patently, but what's the down side? Where doesn't Germany do so well? Home ownership, educational achievement, are two things, for example, etc. Then again why is it that Aldi & Lidl are the only companies with extensive outlets in every single European country, and supermarket companies in every other European country do not have any outlets, in any other country (except Carrefour in Belgium). And it is illegal for a company from a foreign country to take a controlling stake in Volkswagen. We are the ones that ultimately decide what is enlightened. Are we not a ship of potentially too many fools therefore? (ref the Socrates & democracy vid:). Or is it that if, it all seems just, too sensible, too intelligent and too crisp for words, perhaps it is in fact too good to be true?

  9. Just because something works in Finland doesn't mean it will work in the US. Though, it may work in a handful of states if implemented at the state-level.

  10. Also, the GINI coefficient is a famously misleading statistic. There are a million different ways to have a GINI coefficient of any value.

  11. The flaw of every bright idea is the user. Capitalism, Socialism, it doesn't matter because both exist and are meeting the goals of those in charge. It's the people whom are the issues. Billions of variables to account. Capitalism works whether everyone is on board or not. Those who are not lose out, however. You will always have a percentage that will struggle assimilating due to difference of interests, limitations, etc no matter the operating political system. It is a FALLACY to believe that EVERYONE will be WINNERS- that everyone will make it. As long as human will exists to compete, it remains an impossibility.

  12. But before we judge our neo liberal economy, remember that stricter rule or ( Keynesian economy ) sometimes fail when there is there is high demand and no supply, this system proved to be failing when oil crisis happened in 1970 to 80s, and now what we have is mixed system.

  13. How 'bout we start from principles?
    Premise I: Taxation is theft.
    Premise II: Theft is wrong.
    Conclusion: I'll trust you to draw that'n on your own.

  14. The unmentioned conclusion: economic prosperity has little to do with economic system, but climate and religious values. Simply put, the developed nations are largely in temperate regions (most Singaporeans are descendants of migrants from China, as are the middle and upper classes in SEA), and have a Protestant, Confucian, Jewish or Zen ethic or have been influenced by that.

  15. Must the measure of the success of an economy be its growth rate? A longer-term and therefore more intelligent view would take into account the effect of economic processes on the biosphere. Also, growth in what? is also a relevant question. Hospitals and schools good, fast food and coffee shops probably not so good…

  16. Is welfare bad for economic growth? Yes, certainly. That's because the incentive of work is destroyed by welfare, and people might get lazy enough because they're unemployed.

  17. "Good" to see 'Murritard patriotism is still strong in this day and age, judging by the plethora of asinine comments.

  18. Its just a question of the morality of population,if many people abuse it its just destroying the economy and live on the welfare state.I lived in 3 countries,sweden,germany and croatia in europe.All of them have the social kapitalisam.
    So the more homogeneous nation with the same set of morality so the more chance for it to work and my opinion is that in america it wouldnt just work.

  19. Let people decide their future without the intervention of the goverment and it will work. It has worked, it works and it will work

  20. "makes everyone better off"
    One person working could support an entire family in 1970.
    Since then worker productivity has skyrocketed, but wages have barely increased at all, in fact adjusted to inflation wages have fallen. One worker can't support a family anymore. Capitalism is everything for the people at the top, screw the rest.

  21. Also don't allow buissnesses to file for bankruptcy.This will give more power to the people as they choose what buissnesses stay and grow.Also on the equality question I think the bigger the company is the more the ceo should be compensated more and the smaller the company is the less the ceo should be compensated because a ceo in a small company would do less work than a ceo in a big company.Also one problem u didn't really explain much on what to do so I didn't really understand much on what u said to do except give benefits to long term investors

  22. Another video where someone is making crazy flat out untrue statements and talking about things out of context. The sad thing is you idiots eat it up and dont check anything…. FOOLS! remember the old sarcastic saying" if its on the internet it must be true"? Ah if only we could say that with sarcasam now eh?

  23. Capitalism is inherently falwed and unfair, it should be replaced with libertarian socialism like mutualism or anarcho communism.

  24. Ah so when proving a point about how the USA produced more during the higher restrictions you use world instead proving nothing. There are a lot of other countries dumbass.

  25. I like how he says the argument that wealth distribution makes everyone poorer is wrong. Then goes on to tell how countries made every one poor in other countries.

  26. Yeah because the USA is in total shambles because of capitalism. Totally and socialism is always good like Venezuela. Where I bet nothing will ever happen bad

  27. Claiming that the profit motive, now, can be used for "human good", is a sign that all the facts have not been looked at. 😀 Capitalism had its turn…move along 🙂

  28. Capitalism is juat a word conservatives use to mean individual initiative. Socialism is a word conservatives use to mean free giveaways. Of course, if you give free giveaways to the privileged elite, that is fine. Anyone else is a lazy freeloader. That is America today.

  29. It would be nice if this video addressed the issue of over-consumption and the environmental problems resulting from an economic system that keeps creating too much waste.

  30. The title shouldn't be about capitalism also the narrator fails to show the lifestyle of these countries . Of course a post world war two country , on the Axis side , is going to have more growth . Both Germany , and Japan lost the war , thus had NO economy. Rebuilding each economy

  31. The person who put this on here needs to be killed you can not fix it impossible you can not have a system that has to have continues growth good people are fucking stupid

  32. No communist goverment has given their people a decent life expectancy/economy/politics/freedom. Change my mind

  33. Its called getting rid of everything

    The government should not control the economy, which is people
    "To control the economy, is to control the people" – Thomas Jefferson

  34. this is a great video that puts to bed all the usuless discussion about what's best: capitalism or communism. We just need to be pragmatic not dogmatic and try to takke what's best from both and make it work.

  35. "We don't need to overthrow capitalism – just adjust it" goes on to talk about the success of welfare states
    Oh jeeze…

    See, most of everything in the video is fine and dandy: unions, regulations, ect.
    But the thing is that capitalism fundamentally creates inequality and prioritizes profit.
    There are FUNDAMENTAL things that make capitalism undesirable.
    So no, we can't just adjust it. Sure you can adjust things to make it better, but there are some issues that won't truly go away without abolishing it in favor of a system that prioritizes the needs of the people.

  36. The easiest way to improve capitalism is to abolish taxes, free the market and make the state borrow money from its central bank to invest it in national businesses: the businesses can pay the money back to the central bank within a time limit to avoid inflation and fund a better life for everyone including the basic functions of existence as well as attractive cities, good education and universal healthcare.

  37. Human interactions form a complex ecology, not a monolithic "system".

    Capitalism is, like socialism, an idea, not a system. It is the idea that the individual is sovereign, that only the individual can negotiate or be held accountable. It is the idea that the value of a human being is not inherent in gender, skin color or class, but in what they do for others while seeking their own benefit. It is based on the observation that human beings follow their own interests and, when left to themselves, they will find that interest in creating and providing services and products for others. It is the idea that people own themselves and that when they produce something, they also own and decide what to do with it. It is the notion that it is wit and ingenuity to invent or develop goods and resources and distribute them that represents wealth.

    A principled society that is working towards freedom for all, respects the prerogative of the individual to
    seek their own destiny regardless of their heritage or origin, and in so doing encourages respect for others
    and the efficient performance of a desired service. An unprincipled society discourages respect for others
    and people will lose the incentive to do their tasks well. People are most likely to do what they think will

    better their lot, even if that means someone else will suffer for it. This means that interactions must be
    regulated to punish graft, coercion, violence and theft. If freedom is predicated on the sovereignty of the
    individual, then it is immoral to steal what people have earned. It doesn’t matter what the purpose is.
    Whenever you force people to give up their earnings, even or perhaps especially for a cause, you will
    undoubtedly find some who do and some who do not agree with how those resources are used. Those who
    do not agree have had their right to self-determination abrogated and this is the moral hypocrisy of the
    modern state.

  38. All we have to do is say unequal wealth started thousands of years ago. It’s evil to let a few rich people own everything and then say “If you want MY food you have to BUY it!” And if they can’t get a job or money they starve to death! 36 million every year! The rich people did NOT WORK to earn their wealth to buy food or companies! Most INHERITED all of it! Some of the world’s richest people are children who never worked! We can now delete all money because it’s mostly just numbers in computers. Tell people they must work 20 hours a week or go to prison for 6 months. And build only Tower cities connected to maglev Trains. Then we could start eliminating most of the work, because that will change the way everything is done. And if we don’t start eliminating all vehicles we’ll destroy the whole earth.

  39. Every nation they mention with restrictive governments, especially the ones that Bernie thinks are socialists (lmfao) have a large amount of money given to them by the US in the many agreements we have with them. All of their defense is paid for by US. Lets not forget their universal health care that the socialists love so much. Well actually it sucks in terms of reponse times, rationing and survival rates for those who need emergency care. All of their medications are really just the stuff we develop and sold to them. They have no innovation, and they are only wealthy because they are able to suck off the freedom of wealth creation(not just monetary). I would argue that the government now, even under Trump is too restrictive. The government needs to get out of the business of regulating, cronyism, and crushing taxes. Inequality of money is not a problem unless you can show that there was equality of risk, preparation, luck, work and talent.

  40. Capitalism measures its success on naked GDP. Socialism measures its success on how well it divides GDP. Prout measures its success on the improvement of the purchasing capacity of the average—and especially the poorest—of its citizens, which is a function of both. If capitalist owned companies are replaced by worker owned cooperatives that compete against each other, inequality will be checked, but incentive will remain. Income of Co-ops will not be equal, and neither will coop member wages, but vast imbalances cannot arise.
    The success of Uber, or air bnb, is a function of its workers and admin. Both must be beneficiaries of profits. If all the power is with the "owner/s" this will result in exploitation and inefficiency.

  41. Well it seems to be doing better then whatever they have in venezuela or former yugoslavia and what they had in the soviet union. Of course we all know that wasn't true (insert system here)

  42. Capitalism reform in the U.S. is a fantasy. It was tried in the 1930s, and it only took the capitalists five decades to turn that reform back into the Robber Barron hellscape it is today. Americans are too "individualistic" and competitive.

  43. Economic Inequality of outcome is not important. What is important is economic mobility, and we have that. In the us, 3 out of 4 people will reach the top 20 percent at least once in their life. Rich get richer and the poor get richer as well.

  44. Concentrate on NDP instead of GDP and notice that economists ignore the Depreciation of Durable Consumer Goods. So planned obsolescence of consumer trash is swept under the rug.

  45. Giovanni Gentile had a really great idea. More countries should try it.
    Capitalism and Communism are cut from the same cloth. Same goal,,different style in getting there

  46. I have to say I was put off by the first line but I stuck to it and I do agree with some of your arguments for improvement but I disagree with the negative connotation that people automatically put on capitalism. The undeniable reality is that capitalism is responsible for everything we have, it’s responsible for all the progress we have made in the modern world and, though there is corruption, the overwhelming majority of businesses look out for their employees and want to pay them as much as possible.

    I would also like to note, my only knowledge of Korean economics being this video, that it seemed like a lot of regulation for a .04 increase of America’s “lack” of regulation.

  47. capitalism is not raelly the problem… the taxation system is and the money system is…. we are constantly devaluing our curencys by printing more money because of the pyramid scheme that lefty politicians have build :p anybody with a little bit of economic knowledge can tell you that… USA is about to colapse so is germany and many other nations which will lead to an world economics crisis of epic poportions

  48. I have colleagues that had parents gave them houses and I have to work 9hourz a day to survive. Fuck off! Kill the rich and take their shit!

  49. FUCK FUCK THE RICH COMMUNIS WAS WAY BETTEE WE RE BEING LIED FUCK BEN SAPHIRO JBP, PRAGGERU NEWS OUTLETS, THEY'RE BEING PAID TO SPEW LIES THEYY REPTILES

  50. You are not seeing that capitalism doesn't works at full potencial if any economic agent interveins in its mechanism. Just what's happening in every country around the world. The only time you have had the nearly to an absolute capitalism was in XIX and early XX century. People don't like capitalism because it requires hard work and innovation, we are a world of lazy persons, that's all. Greetings from Argentina!

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