May 7, 2014

Thoughts on Capitalism

yiweilim, Yi Wei Lim, thoughts on capitalism, monopoly man, capitalism, board games, classic

As food for thought, a friend posted this quote from the housing bubble: "Capitalism by nature redistributes money upward not downward. It does not allow the masses to win." The thread that followed addressed disproportion in wealth distribution, and the question of whether the rich should be taxed more / are obliged to contribute more to society, etc.

My take:

1. All systems can be gamed. I think capitalism is preferable to socialism: players have incentive to improve and innovate amid a competitive market. Communism, the extremist brother of socialism, is too easily prone to corruption at the top, and thus is mostly self-defeating.

2. We shouldn't begrudge nor overly celebrate the rich. Being rich is one measure of success, although I concede that being materially wealthy gives you space for maneuvering and influence. It also oils the wheels faster: for example, it is easier having one generous donor sign off US$10 million immediately instead of collecting, say, $1 from 10 million people.

However, none of us can truly claim that we owe our successes to ourselves (Elizabeth Warren reference?) - whether you acknowledge it or not, there is almost always an opportunity or luck involved in addition to our individual initiative. Perhaps you were born in a well-to-do family, perhaps your country is not being ravaged by war, perhaps you had a teacher or mentor who guided you. I think it only in the spirit of humanity/brotherhood that we help others who haven't had the opportunities available to us.

I love this story in which a homeless man - when given a choice by a well-meaning young man to accept a monetary donation or learn how to code - takes the latter choice:

However, bringing this fuzzy story down to earth, Leo (the homeless man) was temporarily arrested for sleeping on a park bench. This article discusses underlying issues related to the arrest, mostly on racial and economic discrimination.

My thoughts: it's impossible to have everyone equal, like in a communist's dream, but we can make access to opportunities equal - or at least not discriminatory, e.g. based on race, gender, sexual orientation. 

3. Should we tax the rich more? I'm not sure, and if I'm not mistaken (feel free to correct me and discuss) the jury is still out on whether higher taxes stifle economic growth and entrepreneurship. I did find this old Inc. article on startups in Norway, which discussed several Norwegian entrepreneurs' perception of taxes - not a burden but as an exchange of cash for services. Of course, for this paradigm shift to take place, the services - healthcare, public education - have to be of high quality.

TDLR; I believe capitalism is still the way to go. It's perfectly alright to be rich, but try not to be a rich asshole and help others out on the way or invest in / mentor someone worthwhile - it's useful even from an opportunistic / potentially power-brokering perspective. 

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