So, how can we have an economy that drives innovation and reduce wealth inequality at the same time? Should billionaires exist while there are people in extreme poverty? Can wealth inequality be completely eradicated?
First, let’s talk about the pros and cons of capitalism and how equitable capitalism bridges the gap.
- Drives innovation:
Capitalism has brought development to nations by allowing private entities to create value, make profits, and create more jobs in return.
- Wealth creation:
Without capitalism, there won’t be capitalist, hence they won’t be billionaires like Jeff Bezos, Elon Musk, or even millionaires that have built wealth for themselves
So, this happens when a capitalist has generated enough wealth to buy out small businesses or potential competitors hence reducing competition
- Wealth Inequality:
First, I’d like to say wealth != money.
“Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.” — Naval
One thing we all know is that money drives the world and keeps things moving. From Naval’s definition of money, we all need to spend or make money in order to get on with our lives.
In a capitalist society, the amount of money you can accumulate is limitless, hence you can create more wealth for yourself by owning assets, paying for labor, and enriching yourself at other’s detriment.
- Crony capitalism:
“Crony capitalism refers to a capitalist society that is based on the close relationships between business people and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the government in the form of tax breaks, government grants, and other incentives.” — source
Now, that we’ve discussed the pros and cons, how do we maximize the cons of capitalism, the answer is through Equitable capitalism. What does this mean? Honestly, I don’t have all the answers but I’m gonna go ahead and explain how equity can help tackle some of the problems we have with capitalism.
Equity gives everyone the right amount of opportunity to thrive or give them access to opportunities. On the other hand, Equality levels the playing field, let’s everyone starts from the same place. Equality sounds nice to the ear, but in reality, it’s a disaster because everyone has different needs, hence needs different opportunities.
Alright, so this seems obvious, just put in place policies that discourage the cons of capitalism (monopoly, wealth inequality, and crony capitalism). If it’s that easy, exploitation of resources by capitalists to enrich themselves won’t be happening which in return favors the govt, remember crony capitalism?
To solve this problem, we need people who are passionate about serving the people and doing right by the people. You can’t change the game if you ain’t even playing. Join politics if it sounds fun to you, or be an advocate of good governance.
There aren’t bad or good politicians, there are bad or good people first before being elected into office.
Google changed their motto from “Don’t be evil” to “Do the right thing”, the question here is, “The right thing for who?”
Invest in your society:
At this point, it’s safe to assume that capitalism drives the development of the economy by creating more opportunities for people.
But this is not enough, the govt needs to invest in things like making education, a good health-care system, and grants accessible.
This will not only make life easier for its citizens, but it will promote a system where the people in the society are capable of providing value and having access to systems that can help scale their value production, hence close the wealth inequality gap
Let's say for some really unfortunate reasons, you have to work 2–3 jobs to make ends meet, there should be systems in place that soften the blow for low-income earners: cheap education, affordable health care, and training centers they can learn hard skills that will increase their current income at least 3X.
Billionaires should exist:
They have a higher chance of changing the world faster:
Humans are more connected than we realize and there will always be a food-chain in society, but it should be a controlled food-chain.
Billionaires drive big innovation that enhances human life, being a billionaire means you have the capacity to solve a billion-dollar problem: fund clinical research, invent new technology, cure cancer, advance gene therapy, space-travel, etc.
The innovations you can drive as a billionaire are endless, with this kind of people in the society, they can create values and distribute them at scale because of the leverage they have, while still following the rule of law.
“Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you” — Naval
So, there aren’t good or bad billionaires, there are good and bad people. Billionaires are just a side effect of people who’ve been able to provide value at scale.
Access to capital:
You want to start a business of yours, these people are ready to give you money to start in return for owning some piece of the pie.
So, if the pie is large enough, sharing isn’t a bad idea. So, be a BILLIONAIRE!