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Capitalism 'will collapse on itself' without more empathy and love: Scott Galloway
·Anchor
Tue, December 1, 2020, 7:06 AM EST
The coronavirus pandemic accelerated drastic economic changes that were already underway. And one expert warns that it’s threatening the future of the free market system.
“We are barreling towards a nation with three million lords being served by 350 million serfs,” NYU Stern School of Business professor Scott Galloway told Yahoo Finance Live.
Galloway, the outspoken New York Times best selling author, addresses these themes in his latest book, Post Corona: From Crisis to Opportunity. Specifically, he explores who the winners and losers will be following the COVID-19 pandemic and suggests ways people can prevent a future that threatens to leave millions behind economically.
“We don't like to say this out loud, but I feel as if this pandemic has largely been invented for taking the top 10% into the top 1%, and taking the rest of the 90% downward,” Galloway said.
Wealth by the numbers
A recent UBS PwC study of the world’s 2000 billionaires found “Total billionaire wealth reached $10.2 trillion at the end of July 2020, touching a new high after the year’s V-shaped rebound in asset prices.” It broke the previous record, $8.9 trillion, set at the end of 2019 despite the pandemic’s negative impact on the global economy.
In the United States, a report from the Federal Reserve shows the top 1%, which includes millionaires and billionaires have a combined net worth of $34.9 trillion while the bottom 50% has a combined net worth of $7 trillion.
People stand in line with carts filled with groceries at the foodbank in McArthur, Ohio.
“Capitalism is meant to be full body contact violence and competition to unleash incredible prosperity,” according to Galloway.
But he points out that while the two largest asset classes in America — real estate and the stock market — are at all time highs, “80% of those assets by value are owned by the top 10%” of the population.
Galloway agrees that government efforts to save businesses and financial markets worked during the pandemic. But there has been little, he says, to help people at the bottom of the economic ladder.
“We haven't figured out a way to keep schools open,” an example Galloway cites.
Saving capitalism with empathy and love
A Washington Post analysis of Census Bureau data found one in six Americans didn’t have enough food to eat in the last week toward the end of November.
“A third of Americans are worried they can't pay their rent,” Galloway noted. “This is the best of times and the worst of times,”
“We've decided to protect corporations, not people. Capitalism is literally collapsing on itself unless it rebuilds that pillar of empathy,” which Galloway says in turn supports capitalism.
Congress did pass a $2 trillion stimulus package last March that included a one time $1,200 check for millions of Americans who earn less than $75,000 a year. Those benefits have expired without action on new stimulus to help people who have lost their jobs during the pandemic.
“We've decided that capitalism means being loving and empathetic to corporations, and darwinistic and harsh towards individuals,” Galloway said.
Galloway proposes creative destruction that lets failing business fail while protecting people who lose jobs.
“We let people get fired so that Apple can emerge and put Sun Microsystems out of business, and then we take that incredible prosperity and we're more empathetic with people. We fund Social Security so we can take 38% of seniors who are in poverty down to 11%,” he said.
Despite his criticism, Galloway says American capitalism,”the greatest system of its kind, the greatest upward lubricant of the middle class” can be saved if voters elect politicians who enforce the rules.
“We don't seem to want to hold these companies accountable or to the same standards we've held companies in the past.” Galloway says.
“Capitalism fails unless it rests on a foundation of empathy and love,” which Galloway says requires being harsh at times on corporations and more empathetic and generous with U.S. citizens.
Comments
maybe its just me, but you can find an "expert" who will tell you anything you want to hear if you look hard enough.....
Including past and present presidents
Besides it ceased being capitalism long ago. When Uncle Sam rides in with a big check and saves the day at the expense of tax payers in the future.
Unprecedented Government interference in markets have allowed runaway inflation in asset classes IE: Market is at 30K with no end in sight.
It makes no difference how much wealth the top 10% has. That does not put a limit on what everyone else has. A lot of the bottom level would be there no matter what happens. If you raised everyones wages 100% then the price of goods and services would rise to match cancelling any benefit of the higher wage. There is no good way to make anyone artificially successful, they have to work for it or it means nothing. Bob
I read a lot of these type articles and usually find the bottom line is BUY MY BOOK and learn fabulous ways to enhance your situation.
There is a great difference between class envy and charity. Unfortunately politicians are clueless on the the difference.
But don't forget the theme meme~here,if they have no bread let them eat cake. They have learned from that history since then. You and I are going to get a reset with a cashless society with socialism and a pseudo capitalism from multi-national corporations and The United Nations 2030 agenda. Does anybody here know what the double Irish dutch burger is? I doubt it's going away for Walmart Inc. and the other big players anytime soon.
serf
Tax shelters set up by Lawyers /The organized always uses the disorganized Google with A.I. at it's finest! The golden rule has two meanings,take a guess which one applies here.
https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp
Requirements for Double Irish With a Dutch Sandwich
The first Irish company would receive large royalties from sales sold to U.S. consumers. The U.S. profits and therefore taxes are dramatically lowered and the Irish taxes on the royalties are very low. Due to a loophole in Irish laws, the company can then transfer its profits tax-free to the offshore company, where they can remain untaxed for years.
The second Irish company is used for sales to European customers. It is also taxed at a low rate and can send its profits to the first Irish company using a Dutch company as an intermediary. If done right, there is no tax paid anywhere. The first Irish company now has all the money and can again send it onward to the company in the tax haven.
Example of the Double Irish With a Dutch Sandwich
In 2017, Google reportedly transferred 19.9 billion euros or roughly $22 billion through a Dutch company, which was then forwarded to an Irish company in Bermuda. Companies pay no taxes in Bermuda. In short, Google's subsidiary in the Netherlands was used to transfer revenue to the Irish subsidiary in Bermuda.
Exactly right, Bob. That's the false premise many on the Left start with. The economy is not a zero-sum game. For a rich man to make $1 more does NOT mean a poor man makes $1 less.
You want to be in the richest 10% on planet earth? Simple: own two pairs of shoes. That's all.
Two pairs of shoes ? Now that's exactly why The U.N. is trying to do with Agenda 2030. I look for a U.N.tax and it will be on how affluent you are in your status paradigm. They even might go after Tax havens when digital cash becomes mandatory. That 's why The Feds are buying all the debt to own things instead of making money that can be tax later when they do the reset.
serf