this post was submitted on 09 Apr 2024
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Unfettered capitalism will be the end of us.
Capitalism can work to our benefit. It's main benefit is incentivising people to get more, which seems to work well at encouraging people to be productive. The main idea is supposed to be efficient resource allocation, but that plainly does not work as it leads to wealth accumulation at the top.
Our problem is twofold. The first problem is we externalize negative costs onto society. So environmental damage, health costs, workers pensions, roads, bridges etc.
The second problem is efficient wealth distribution. Currently we focus on income rather than wealth. We should tax wealth just as much as income. We certainly should make any use of an asset as collateral a taxable event.
Some things that might help. We should look at changing taxation systems to be a formula rather than bands. The more income you get, the higher it goes. The lower your income, the lower you're taxed. Same as now but rather than having to meet a threshold to move bands, every dollar is taxed based on where it falls in the distribution curve. It would be more complex for people to get their heads around at first, but actually simpler for all calculations going forwards.
UBI would also help with redistribution and make society more efficient overall.
This is a great write up. I think the problem with economic theory discussions is it is an extremely complex and nuanced topic. Saying 'capitalism bad' is popular, but not very constructive.
I think one big point that gets bungled in these economic debates is markets. That's supposed to be the shining light of capitalism because of how efficient markets are at allocating scarce resources. The point that I think is missed, is that markets can be used very effectively outside of a capitalist system. They need to be designed for other economic systems, but they can easily handle the biggest argument with socialism; centralized control.
I feel that is a major point missing in these debates and I just wanted to give it some attention.