It appears that can be entirely divorced from capitalism.
Just because we have demand driven resource exploitation doesn't mean that all of the profit has to be provided to a small over-class.
Indeed, wouldn't it create a greater ability to follow demand if the wealth were evenly distributed?
(We might ask if making the human race into the perfect resource-exploiting parasite is going to work well for us long term, but that is a very obvious limitation that diverges from the current discussion.)
That is required for capital markets to work.
How about $5 spread over 1 million people? How about $5 million?
Money is invested because people with money chase yield, if yields are positive, but lower across the board, that money would still be making the exact same investments.
But it's certainly not the case that people make the "exact same" investments with or without taxes, especially of course as taxes get higher. Money will shift out of investment to consumption as expected profits decrease, or indeed out of the tax regime to other areas or to black markets.
the goal is to have investments that serve broad interests. instead of investing in better yachts, supercars, jets, etc.
instead of investing into Amazon to dropship fake shit for quick bucks our economic surplus ought to go into developing better actually useful appliances, tools, technologies
for example, instead of OralB and Philips bamboozling us with sonic this and that with smart AI toothbrush marketing we ought to actually figure out dental care.
okay, sure, higher taxes on the wealthy doesn't guarantee more conscious consumerism, but might at least give it a chance.
Except on the middle class. All capital gains do to middle class workers is ensure they stay middle class
The reason that markets work is because participants have "skin in the game", and losing money would hurt them, so they want to avoid losing money, so they try to make good decisions, and those that don't lose their money and are disempowered in the process. But once you reach a state where you're so wealthy that money no longer matters, you are able to distort the market at will, making it irrational (and thus inefficient) and destroying its ability to efficiently allocate scarce resources.
I wish more people understood this. You don't need to go full communism and make everyone's wealth equal, but if you want markets to work you do still need to make sure that the wealthiest are not so wealthy that they won't suffer from making poor financial decisions.
Please provide a case history.
It’s not, and it is a fiction to say it is.
Capital wealth is a representation of total risk adjusted future expected returns subject to a discount rate.
But we don’t advertise human capital this way; the excess future labor returns adjusted for some basic cost of living.
But they are the same thing: future profits.
If advertised this way, relative wealth would look vastly different.
He uses the phrase "perfect liberty" to describe the ideal version of a market and also understands this will never be equally applied or possible with all markets.
It's an amazing piece of work and I'm really enjoying the audio book as it reads more like a lecture and is very pleasant to listen too.
Airbnb’s founders sold parody cereal to hustle up the money to keep their business afloat.
See North Korea, Cuba, Soviet Union, and China as examples.
With the exception of China those example countries have either rich or poor people. There is no middle class.
At least in capitalist driven societies like western nations there can be a middle class that lives relatively well off and cheap options of consumption that also allow poor to have the basics in life.
A world where the Nazis won might have less inequality after they succeeded in killing everyone without blonde hair and blue eyes. But more likely they would have gone on to look like a brutal dictatorship with very few among the top class living lives remotely similar to what we know today. I doubt they would have had a Moores Law let alone chip manufacturing. We do know the Soviets bankrupted themselves and did have greater inequality than the capitalist system they were competing against while benefiting from its existence. China of course benefitting similarly to modernizing with the modern worlds free market thriving outside its borders. Heck, that tale is a victory story of capitalism over communism as the CCP very much had to capitulate and allow the market to function in increasing scope over time, reluctantly.
If we’re talking about which economic system would have greater inequality than we have to take the thought experiment out much farther than your initial quip. There certainly is inequality in the modern free market. It’s certainly far better and equitable than any system tried before or “on offer” in WWII. That war seeing the victor rebuilding the losers over several decades instead of rubbing sand in their wounds as every war saw in the last to that point. Modern day Japan and Germany.
If economics is to be treated as a legitimate science, it needs to move away from thought-based theory into evidence-based testing.
"Capital" is just a proxy word for resources.
How can you develop anything without resources?