| > It absolutely is zero sum - but not from the point of money, but from the point of view of another finite resource; human labour and talent. I think your point is less about wealth creation, and more about access to capital and how that influences who can fund what work. It's a subtle distinction, but I think an important one - and yes you're right access to capital and how capital is allocated is zero sum and this influences what work is done. I don't think this is entirely a bad thing though because in a society with an effective market what makes money should be related to what people want. The incentive alignment that comes from this (and capitalism generally) has allowed the largest creation of wealth in human history (of which everyone benefits when you look at things like infant mortality, public health generally, standard of living, etc.). This doesn't mean there aren't places to improve in terms of equality of opportunity for access to capital or that there shouldn't be rules to prevent incentives that can lead to outcomes worse for individuals and the group (see the fish farming story in this: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/), but it also doesn't mean that the wealth tax or dis-incentivizing wealth creation is a good idea. Venture Capital is important here because it gives access to money to people and ideas that would have a hard time getting it otherwise (on bets that only occasionally pay off huge). We want people to be incentivized to take risks and start companies that can create massive amounts of wealth and entire new industries. If you have a wealth tax, someone making a couple million a year as an investment banker will be less likely to leave and risk that money to create something since they'll probably get to the cap without doing that anyway. Starting a company is already a pretty hard/risky decision to make, we don't want to make it harder. > How many talented engineers work at Rolls Royce to create £250,000 cars which would be better put to use elsewhere? How many software engineers work at startups funded as a moonshot for the wealth of the founders work on CRUD apps where they could be working on something like scientific or educational tech? How much chemical engineering talent do we sink into cosmetics? The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile, but I think you're too dismissive of things like CRUD apps. Those things provide enormous value for the companies that need them (I think even cosmetics research has led to new medical knowledge). That said, I agree with the spirit of your questions - I wish humanity was better at coordinating. There's so much we could do if we were better at coordinating. I think capitalism and incentivizing for wealth creation (with controls for human rights/environment) is the best we've got to make the most progress the fastest. It aligns human nature and rewards people that make things that people value. There's a risk of a corrupting influence on liberal democracy that needs to be controlled (https://www.ted.com/talks/lawrence_lessig_we_the_people_and_...), but I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth. Does this mean you end up with things like Las Vegas where human investment would be better off elsewhere? Yes, but I think that's an acceptable trade-off for everything else you get (and people like Las Vegas). Attempts to remove the capitalist incentive structure and dictate what's important for people to do (or worse control how money is allocated to people) seems to lead to massive corruption and people doing what's necessary to get the money (which is often unrelated to actual success). As far as Academi - I'm not arguing for unregulated, no-government, capitalism. Companies should provide value within society and society should enact legislation via elected representatives in some form of liberal democracy (and companies should operate within those laws). I may not agree with every action that happens here, but nobody will - and that's why we have liberal democracy to sort it out. |
I agree; I'm talking about the allocation of capital in a capitalist society; I'm effectively arguing that inequality and wealth distorts the markets such that capital is allocated to be invested in products which those who are richer care more about - to put it in a more reductive way the fitness function is a simple maximum rather than, for example, having a scaling factor per person.
A liberal democracy is intended to be the latter, but as we've seen, enough wealth and lobbying implies that you can indeed, influence enough of your fellow populace to vote how you want them to.
> I think this is best structure for society to efficiently allocate resources/capital in a way that encourages the most wealth creation and growth
With all due respect, this is similar to the argument laid out by Leibniz when asked about the existence of God; that is that "We live in the best of all possible worlds" - and in that case the rebuttal is the same, given that the proposition is such a strong one the burden of proof is on the proposer. After all, Mercantilism was thought to be the best system during the Rennaisance and Feudalism in the Middle ages to give two examples of economic systems which were later discarded.
> The way to fix this is with incentives that encourage people to go into areas society thinks are more worthwhile
Capitalism only has a single answer to this question; the areas which have more capital are by definition the areas which society thinks are more worthwhile! Which, is why it is an incredible system - it manages to make people who by and large are self-interested and self-organize and as you say has been the biggest driver for human wealth and prosperity for over a century without the need for some benevolent dictator.
To my mind, there are several really big problems which we have to face in the coming years. You alluded to it here tangentially;
> people like Las Vegas
I think with adtech industry and social media, it's incredibly easy to influence what people desire and want - if you can control what people want; can we still really say that capitalism makes people more prosperous, if the very reason that they were poor because we induced artificial needs and desires in them?
On a more practical level, I agree with you; people should be incentivised to start companies because it's good for society. But where we disagree, possibly, is that money is the only driver which causes people to start companies. The IBD banker in your example, would start the company regardless of whether the payout was lower, but by implementing a wealth tax, maybe the we could give the opportunity to the teacher with the great idea about educational technology to create _their_ business and enrich society.