Dalio himself isn’t setting out to build a worker’s paradise or to make financiers like himself obsolete, but he does have some trenchant thoughts on capitalism’s failures—and they are many, in his estimation.
I didn’t watch the video and I haven’t read Dalio’s essay on Why And How Capitalism Needs To Be Reformed (though it’s on my reading list) but my quick thoughts are that capitalism only has two faults.
- Capitalism is amoral. If I can make money helping people then capitalism thinks that’s great. If I can make money killing people then capitalism thinks that’s great. As long as we make money it doesn’t matter how. In theory the market will punish the latter but in practice that hasn’t been true. Personally I think that’s because markets only work when they’re relatively small and when the buyer and seller have roughly equal info. In today’s global marketplace the corporation has so much more… everything, that consumer is essentially powerless. You have get millions of people organized in order to punish a bad actor with the result that very few are ever punished. So there’s no need for them to change.
- This might just be a subset of the morality but, capitalism doesn’t have any concept of enough. The amount of money that any corporations seeks to make is all of it. And as they’re unburdened by morals and unpunished by the marketplace they will end up hurting people in their never-ending quest for more money.
A note on morality: I’m not saying the people, CEO’s etc, are amoral, though many of them are, I’m saying the system is amoral. Capitalism’s definition doesn’t include anything about morality. Here’s the definition from Wikipedia:
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.https://en.wikipedia.org/wiki/Capitalism
Emphasis is mine because now I see the problem in the US. We’re not capitalist. We definitely believe in “private property”, “capital accumulation” and “wage labor” but we don’t believe in “competitive markets”. We give lip service to the idea but if you look around the US what you find is giant corporations using their size to push out or buy competitors or smaller markets where the government has been manipulated to kill competition.
So what type of economy believes in “private property”, “capital accumulation” and “wage labor” but not “competitive markets”? Cause the US needs to stop calling itself capitalist.
Read Daylio’s article, Why And How Capitalism Needs To Be Reformed and I’m in agreement with most of it but I don’t see the “how” part. He says some stuff about “leadership” and then he says “redistribution” and… no actual “how”. Basically he’s says in a very milquetoast way that the people at the top need to get their shit together. Really? Those are the people benefitting from the current system. Not sure you’re gonna get them on board with changing things. Getting them to give lip service to “change” while not really doing anything should be pretty easy but if you want real change you might need to convince voters to stop supporting people that don’t support them.