Sustainable Standards and Free Trade - Pt.4

in #capitalism • 5 years ago

Maybe not enough trickles down...

Capitalism has become like a banker spilling coins between his fingers as he robs the vault - the only thing left for those at the bottom of productive hierarchies is whatever drops through the fingers of those who benefit most in our current structures. People are quick to blame this inequality on corruption. On a bad system.

modern capitalism.jpg

But there is an interesting idea put forward in the book "The Great Leveller", the concept of the book is that historically, and in all societies inequality always rises…..except when some major disaster flattens everyone out again, such as war, famine, etc. It proclaims that we should actually hope that inequality increases, because the only consistent mechanisms that reduces this economic inequality are catastrophes on a scale which make living through them much worse than living conditions that results from any common economic disparity.

the great leveller.jpg

Somewhere within is the proposition that even if economic inequality does rise, that the says nothing to the fact that concurrently conditions can improve for those at the bottom rung of society. The floor keeps rising. That all of us, including the world's poorest are brought along with that rise.w

Radical egalitarianism doesn’t seem to me to be the answer. We have seen examples of these massive failures in the communist regimes of Stalin in the The Soviet Union, Po Pot in Cambodia, Mao in China. Wherever the claim of more for all is taken up, the power seems to end up in even fewer hands. These hands are too often those of radical authoritarians.

China the most famous communist country on the planet now is in fact only like a crystal ball of State Capitalism, with a thin silk sheet of communism laid over it to obscure the crystal ball.

The Visible Hand.png

It’s actually a pretty amazing system to be a part of in the short term. One of the major problems with democracy is that you can’t get anything done. Everyone has their voice and has a say in the goings-on of the future, right down to the stodgy old hold tight who doesn’t want anything to change. The cry of N.I.M.B.Y. is rallied around by those who resist progress, yet are too old to actually be around to see the fruits of that progress

China is outsmarting The West right now by playing the capitalist game as well as it can be played. At the same time keeping the levers of power held by so few in the country that they can push through new law and regulation at a dizzying pace.

A dam needs to be built, they have the money and can instantly change the zoning. A town is in the way of a waterway needed for development - they relocate the citizens and make them tear down their houses on the way out. A new system of peer-to-peer money transfer is created that threatens the countries banking system….they can ban it within weeks and block all access for it through the internet in a day.

Beijing 500.png

I am not saying that these are the right moves. Certainly it may not last many more decades as a way of governance. They are problems with it, for instance did you know that in China if your company gets to the 2BN mark, it is common practice for it to be absorbed by the government. It becomes a State Owned Enterprise…..now that clearly presents issue. What entrepreneur is going to want to build a business when they know that is in their future? If they are super successful, they have a guarantee that the government will come in and bureaucratize it from top to bottom. Not a playground for the self-sufficient at all.

However, in the short term this dilemma is not seeming to slow anything down on China's great march to modern industrialization.

So radical inequality is likely to capsize, and radical equity is even more unstable, awful and corrupt.

This is where the idea of voluntarily redirecting a percentage of the profits down to fund new businesses and endeavours at the bottom appears out of the fog of modern capitalism to be a little extra off the top, to be directed back down to the bottom line. The line where new businesses are created and where new economic opportunities live.

The squeaky wheel gets the grease after all...but what happens when we have too many squeaky wheels and not enough grease?

Did you know that entrepreneurship in North America is at an all time low. New company formation is lower than they have been in 40 years.

Kevin Kelly, who is known as the oracle of the internet closed his last book by saying: That this moment, right now, is the best time ever in history to start a business. More tools, more resources, learning is free, everyone is connected, ideas are flung around the world at light speed and small businesses can access more resources than ever.

So why are less people than ever starting new businesses…..rates of entrepreneurship in The West are at an all time low. Why?

This will be the content of the next post.

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5 years ago in #capitalism by
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