Has Capitalism Failed Us?

I’m a true capitalist by heart. No one enjoys freedom as much as I do. I love the United States; I love the massive opportunities that people get in this country. I do. And I don’t think capitalism is the wrong approach to fixing today’s flaws in our society.

We, as species, haven’t progressed as much in 100,000 years as we did in the past two centuries alone. This was mainly because we have never been given the freedom that we’ve enjoyed these past couple hundred years. But capitalism, today, due mainly because of the horrible banking system that every country on earth has implemented and the unbalanced governing rules that the 1% of elite members of society created are failing society and we need to do something about this.

Please take a look at this graph. Stare at it for a good half a minute.

Changes in Share of Income vs 1979, after taxes and inflation

This is insane. This graph is essentially saying that the rich have multiplied their wealth by +150% (and growing) while the middle class and the poor are actually making less money today than they did 35 years ago.

What’s the problem with this? In a free world. In a capitalist country. Why should we worry about the rich (1% of the entire population, 18% if we include the entire upper class) exponentially increasing their wealth day after day when the rest of the world is struggling to keep up with inflation and the fed’s money-printing scheme?

A couple of reasons… But let’s start off with the underlying root of the problem.

The Problems With Today’s Capitalism

A World Ruled By the Elite 1%

Again, I’m a capitalist by heart and I love freedom. Humans will keep making progress as long as we’re given enough freedom to keep building things that revolutionize the world. But I also believe that as humans and as capitalists, we have the moral right to make as many humans as happy as we possibly can. Let me explain.

I used to believe that taxes were someone’s biggest expense in the US. I was wrong. Growing old is the worst thing and the most expensive thing that can happen to you if you live in the states. Why? Because as you grow old, your body starts to deteriorate. You start needing to make use of medical appointments. Medicine. And oh boy… do the medical bills add up… There is no reason why the United States doesn’t have a free healthcare system. No reason whatsoever. There are plenty of US dollars to cover for everyone’s healthcare. They are just not in the right hands. Who pays the price? The poor and the middle class who can’t afford a private healthcare system. The rich couldn’t care less about a public healthcare system or a free college education system for everyone. They have enough money to pay for these things.

You might be telling yourself… Uhhhh… Yeah… but they are rich for a reason. They have earned their place. And sure they have! Politicians like Sanders who think that billionaires shouldn’t exist are going a bit too far in my opinion. The problem isn’t that there are billionaires out there. The problem is that billionaires who have earned their place at the top of the ladder aren’t contributing to society the way they should be.

Today’s taxing system in the US is completely rigged. Want to know why? Because rich people don’t pay taxes. None of them do. Not Trump. Not Jeff Bezos. Not any of them.

Now… here’s the thing where most people get fooled…

Jeff Bezos paying $80,000 a year in income tax does not make sense. To me, if Jeff Bezos is going to contribute $80,000 a year in federal taxes, he might as well stick it up his butt. How can the richest person in the world be contributing less to society than I am?

The same could be said about Bill Gates. Now this guy at least recognizes that there’s a problem. Gates opened up and said that he’s paid $10 billion in taxes. That’s a lot of money for the federal government. But the thing is… he should have paid even more than that. And he’s the first big whale to admit to this. Let’s break up the numbers really quick.

In the US. most middle-class people have a fixed income tax rate of 22%. As your income grows, so does your tax rate.

Bill Gates’ net worth is currently $105 billion. He’s paid $10 billion. That’s 10%. People in the US. with incomes higher than $500,000/year should be subject to around 37% according to federal law. So how come Gates has only paid 10% of his wealth in taxes? Well… here’s where the rich people get smart and prove that they have a higher financial IQ than the middle and lower-class people.

Rich people barely have an income. Most of their income gets automatically invested. They don’t keep money in the bank. And when you invest money in things like stocks, real estate or you simply donate the money to someone, the government doesn’t consider your income as regular income anymore. Rich people usually buy real state or acquire companies. They provide housing, jobs… Also, most rich people are heavily in debt to be able to get tax breaks from this too. It gets very complicated, as there are many ways in which rich people get tax breaks. But, you get the idea right? Rich people find ways to use income to both generate more income and also get tax breaks at the same time. This is why the rich keep getting richer and the poor keep getting poorer. They don’t contribute to society. They only make money off society.

Remember back in the 2016 election when people were asking Trump to release his tax records? We’re still waiting for this to happen. Let me explain to you why he’s not releasing his tax records. And why he never will.

You and I pay more taxes than Donald Trump. This is why he’s not releasing his tax records. Because he knows people will freak out as soon as they see that he’s paying less than a server working 6 days a week, 10 hours a day. Trump releasing his tax records would be the ultimate proof that the middle and lower class work to keep the 1% of the world up where they are.

And let me tell you something else… Donald Trump is not a criminal. Well, he might be, but not because of his tax records being illegal. He plays things by the book. This is why today’s taxing system is completely rigged. It only favors people who sit at the top. Mainly because tax laws were written by people who sat at the top. This is why only the ones at the top have become richer while the rest of society works for them.

Survival of the Fittest (All Over Again)

We are building an elite that could potentially take over society at one point. This might sound drastic – but it really isn’t. Keep on reading.

With the emergence of artificial intelligence and biotechnology, super humans are just a matter of years away from us. It could be decades, or it could be centuries. We don’t know. But the fact that these elite members of society are going to be the first ones to be able to afford to merge themselves with AI is scary to say the least. These people have the opportunity to literally become the next generation of humans as we know it.

Homo Neanderthal-is. Homo Sapiens. Homo technologicus?

Who is to say that once these privileged members of society morph themselves with AI, they won’t take advantage of their recently acquired skills to manipulate us? Maybe to even eliminate us? Homo Sapiens were able to exterminate Homo Neanderthal-is because they outsmarted them. Primarily because we could communicate in ways that Neanderthal-is couldn’t. Homo technologicus will be able to do much more than just communicate better than us. I can foresee a world where the middle class will be completely eliminated and there will only be homo technologicus and the poor who weren’t rich enough to adapt.

You might think I’m delusional. Or maybe even that I’m crazy. But I’m only comparing our current situation as species as what happened to our ancestors. Only time will tell. What is 100% obvious is that we need to reduce the gap between social classes so that the ones at the top don’t have complete power over us. We also need to start thinking of ways to regulate the use and appliance of artificial intelligence. I have friends in Silicon Valley who are frightened by the things AI is capable of doing today. It’s not just mechanical work anymore. Computers are learning to use cognitive skills to understand emotions.

This is getting exciting. And scary. Super humans are coming.

The Solution

Now that we understand some (not all because I don’t plan on making a book out of this post) of the reasons why today’s capitalism is failing. How do we move forward? How do we fix these issues?

It really isn’t that hard from an intrinsic standpoint. We simply need to make sure that the rich start contributing to the society like they should be. Just like everyone else is doing. Just like you and I. This would definitely be a good start.

Again – I love freedom. I love America’s social democracy. But we need capitalism to evolve. This is why I think everyone should listen to Andrew Yang. I think his ideas are even better than Warren’s or Sander’s. I don’t disagree with Warren (heavily taxing the wealthy), and I think Sander’s might be taking things too far (massively taxing the wealthy to the point where most billionaires would become millionaires). But any of their ideas would also be a viable solution for the flaws that today’s capitalism is facing.

You don’t need to agree with my ideas if you don’t want to. But maybe agree with the richest men on earth like Buffet or Gates who support my viewpoints? And if they can’t convince you, maybe you simply don’t want to be convinced which in that case I can’t help you.

One last thing – sign-up to my email list. Just do it. It’s free and I send out tips now and then on how to make money and run a business. I may rant every once in a while about politics too, but usually I make people laugh and laughter is always welcomed, right?

Author: Tony Lewis

Marketing nerd, blockchain enthusiast and part-time planet Earth explorer. I like building (and acquiring) long-lasting assets.