Here is my response to both the post and the article itself.
If by capitalism he means the system we have in place today. I agree. However, the term for what we have today is not "capitalism" is the true sense. It is "cronyism" or what I call "handicapitalism."
Most truly understood we have a system where the elites in big government and big business have combined to control the resources of production. Including, BTW, the currency itself.
The most accurate term from an economic standpoint is fascism. (Note not NAZISM.) Fascism, from an economic perspective is control of the resources, but not means of production. This latter state is called communism.
Please note I am not a Republican or a Democrat and I am not calling Bush or Obama fascists. I am saying the the policies of the US government have become increasingly fascistic over the year no matter who has been in the White House.
Now that said, what Mr. Schwab is describing as the replacement of this so-called “capitalism” is really just the market responding to the idea of knowledge workers. He calls this idea “talentism,” but is really nothing more than a meritocracy based on knowledge.
Sorry my progressive friends, but Warren’s quote is nonsense. It ignores the most basic principle of a freer (not free) market – that wealth is generated on both sides of the vast overwhelming majority of transactions. Her quote implies a zero-sum thinking about the economy. It is false and I believe dangerous. It implies that everything you have done is at the expense of others. I hope none of you believe that.
Capitalism is, by definition about paying it forward. Farmers, factories, software companies, and consultants produce things (food, goods, services, and knowledge) that are of greater value to the purchaser than to the buyer. What is more, they create these things that are for the betterment of customers whom they do not even know today. In other words, they are being altruistic. Altruism being defined as “other centric.”
The roads, schools, and police to which Ms. Warren refers have been paid for, their makers have received just compensation. Where did the compensation come from – the people in the first place, but how did the government get this money? By claiming a share of the profits. In effect, Ms. Warren is claiming a double debt.
Ms. Warren while intending to or not is also making a great limited government, public choice theory argument, namely for schools, roads, and police. If government (and it should be the local government) were ONLY using tax money for the building roads, the education of students, and the funding of police, the tax burden would be much less. Instead we bailout failing companies, start endless wars on ideas (drugs, poverty, and terrorism to name a few), and now are taking over the healthcare industry.
The US federal government is quickly becoming a large and in debt insurance company with guns.
Personally, I do not think corporations should be taxed at all. There is mounting evidence that high corporate taxes result in lower wages for workers. After all, businesses just view taxes an expense. If the budget line item for taxes is made higher, then another line on the budget has to get reduced. Often that other line is wages and salaries.
Now, I am no corporatist. I think the bailouts were a travesty of justice, but notice this was government action once again interfering with the market.
Both governments and corporations are made up of people, flawed human beings. To paraphrase Milton Freidman, is political greed somehow nobler that economic greed? At least with economic greed a) the corporations have no guns (save those than make them) therefore cannot force me to buy something (even if it “for my own good,” see the mandate provision of Obamacare) and b) if we don’t like what a company sells we can quickly vote with our wallets rather than once every two, four or six years.