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I'd refer you to Peter Turchin, War and Peace and War. He argues that it's not capitalism that leads to wealth concentration, it's peace, stability, and prosper

I'd refer you to Peter Turchin, War and Peace and War. He argues that it's not capitalism that leads to wealth concentration, it's peace, stability, and prosperity -- since we can see this problem worldwide, and very far back in history. Since peace breeds wealth concentration, it eventually ends in a crisis (normally a period of major wars); the crisis mostly kills people and ruins lives, but it also disrupts concentrations of wealth as a side-effect. Eventually the wars end in a peace of exhaustion, with wealth a little more equitably distributed (or at least enough wreckage that everyone can make money by rebuilding), and a period of peace and wealth concentration begins again. Solutions to this problem that have been tried and failed include: * Endless war. This doesn't do much the problem of concentration of wealth (warlords as well as capitalists have high wealth concentration), and it creates sociological problems; for details in a familiar context, read Albion's Seed, specifically the section on the Borderers/hillbillies/Scotch-Irish. * State ownership of some productive capital (Britain after WWII) or basically all productive capital (the USSR). This works well for a while (see How Asia Works), but if kept around for too long it breaks down, producing complacency, mismanagement, and an inevitable fiscal crisis. Thatcher and Gorbachev did pretty much the same thing, for pretty much the same reasons. * Wage controls, price controls, tariff walls, heavy internal regulation. The New Deal, Ireland under De Valera, all European governments before the 1700s (see Braudel, The Structures of Everyday Life), and the Tokugawa Shogunate did this. For as long as the will to enforce everything exists, this approach sort of works, and it slows down wealth concentration and the development of crises; but it doesn't stop them entirely, and the crises are likely to be really explosive when they hit. (See also the 1700s, 1968, and the fall of the Tokugawas.) It also leads to technological stagnation, which has other obvious problems. * Letting the market work its magic. See Upton Sinclair, The Jungle, for why this is intolerable in practice. Don't ask me for a magic bullet, none of the ones above work and I don't know what others there could be. Perhaps the solution is to just be aware of the problem and try to manage it...

jack9 10y ago
> it's peace, stability, and prosperity In the absence of other factors, it's every known system itself. This is not the same as them being causes. The observation is that humans have not found a suitable system.
dleslie 10y ago
Some ancient societies deigned it honorable and mandatory for the most wealthy to be sacrificed to the gods and their property to be thereafter redistributed by the state. Some forgoed the sacrifice and allowed them to host large community events where their wealth was shared broadly. Others made it fashionable and socially expected for the wealthy to be absurdly risky with their investments and so ensure their wealth would be redistributed regularly through the risk and reward of the market.
- AnthonyMouse 10y ago
  > Others made it fashionable and socially expected for the wealthy to be absurdly risky with their investments and so ensure their wealth would be redistributed regularly through the risk and reward of the market. This one seems to be the one we're missing today. In particular because of two trends: a) a tax code that encourages large piles of cash to be accumulated offshore inside corporations and b) the modern trend of large companies to be publicly-traded rather than privately owned. So then you get a billionaire who owns a large percentage of their own publicly traded company which itself has a hundred billion dollars in cash inside of it. He can't direct the company to use the money for risky investments because that's not what the other shareholders want, but neither can he extract his share of it to do that with because it would incur a huge tax cost. If we fixed this we might have a dozen instances of Elon Musk instead of just one.
- clock_tower 10y ago
  I still like the potlatch system, or some similar turn towards "Big Man" economics, but that's a brilliant insight, that risky, sketchy dot-com investments serve as a way of redistributing wealth! I need to remember that transhumanist axiom, that "the purpose of a system is what it does" -- and not what it claims to do.

jack9 10y ago

> it's peace, stability, and prosperity In the absence of other factors, it's every known system itself. This is not the same as them being causes. The observation is that humans have not found a suitable system.

dleslie 10y ago

Some ancient societies deigned it honorable and mandatory for the most wealthy to be sacrificed to the gods and their property to be thereafter redistributed by the state. Some forgoed the sacrifice and allowed them to host large community events where their wealth was shared broadly. Others made it fashionable and socially expected for the wealthy to be absurdly risky with their investments and so ensure their wealth would be redistributed regularly through the risk and reward of the market.

AnthonyMouse 10y ago
> Others made it fashionable and socially expected for the wealthy to be absurdly risky with their investments and so ensure their wealth would be redistributed regularly through the risk and reward of the market. This one seems to be the one we're missing today. In particular because of two trends: a) a tax code that encourages large piles of cash to be accumulated offshore inside corporations and b) the modern trend of large companies to be publicly-traded rather than privately owned. So then you get a billionaire who owns a large percentage of their own publicly traded company which itself has a hundred billion dollars in cash inside of it. He can't direct the company to use the money for risky investments because that's not what the other shareholders want, but neither can he extract his share of it to do that with because it would incur a huge tax cost. If we fixed this we might have a dozen instances of Elon Musk instead of just one.
clock_tower 10y ago
I still like the potlatch system, or some similar turn towards "Big Man" economics, but that's a brilliant insight, that risky, sketchy dot-com investments serve as a way of redistributing wealth! I need to remember that transhumanist axiom, that "the purpose of a system is what it does" -- and not what it claims to do.