The dirty secret of capitalism -- and a new way forward | Nick Hanauer

▶ this video (Nick Hanauer TED talk) Ask an economist about WHY economy exists in the first place and you can put a bet on the fact that many of them get it wrong. How can anything building on that be right then? Exactly.

Almost everybody is dancing around it here, but the real lesson here for us all is that capitalism, or, at least the way we're doing capitalism today, is unsustainable. You simply can't have the kind of sustained transfer of wealth from lower and middle income people to the top 1% that we've had over the past 50 years and claim what you're doing is a sustainable system. I recently saw this video: ▶ this video The speaker, Nick Hanauer, has a net worth somewhere around a billion dollars. In his talk, he explicitly says he's a capitalist, capitalism is good, etc. But, if you ignore all that and look at the rest of what he says, he comes this >< close to advocating socialism. According to him (and I agree), the lessons we should be learning here are fivefold: 1. Markets aren't anywhere near as efficient in reality as they are in theory. That leads to some counterintuitive things like when Seattle raised their minimum wage, it didn't lead to unemployment because the price of labor went up; it led to people who work in restaurants being able to afford to eat in restaurants, which is good for the economy. Oh, and unemployment actually fell in the region while this was happening. 2. A big pillar of the neoliberal myth is that "...the price of something is always equal to its value." He directly goes on to tie this to the case of one person who makes $50k per year and another who makes $50M per year. The second person's work isn't 1000x more valuable than the first. The person getting pai

link (The Corporation) I'm soon leaving a company after having seen it grown from a mere startup to what it is today. It had a goal at the beginning, had to fight an entire industry to get an idea across which is accepted broadly nowadays. But there is also a strong inertia towards making these non-goal "goals" more and more important, which in turn define more and more how this company operates inside and what comes out of it in the end. It requires strong and really good leadership to see this problem in the first place and then prevent such a construct from sliding down that slippery slope. The problem with stuff like socialism, communism, but also capitalism is simple: Humans. You create rules, you have conceptions of how something could work. You add humans, and things go sideways. Even if you aware of the issue, there is potentially no way to create something stable, it requires humans to stop other humans from being dicks, as sad as it sounds. It only needs a few dicks to break pretty much everything into pieces. Worse, more often than not, there was not even real ill-intent in the first place, like with the company I've written about above. The only way we can change things on a larger scale is to change the incentives, to change the overarching goals. Check ▶ this video (TED talk Nick Hanauer)

Some links on wealth inequality that I've read/watched recently: - Income Inequality and the Taste for Revolution link (Study based on global survey data and GINI coefficients.) - Robert Reich: Everything You Need to Know About the New Economy link - The dirty secret of capitalism -- and a new way forward | Nick Hanauer ▶ this video - Why Free College Could Increase Inequality link