4 ms·
> In an ideal capitalism society, the most talented should earn the most, but the compounding effect of capital makes it so that whoever holds wealth the longes
by LyndsySimon 9y ago
> In an ideal capitalism society, the most talented should earn the most, but the compounding effect of capital makes it so that whoever holds wealth the longest earns the most.
From the perspective of an anarcho-capitalist, this does not describe the "fitness function" of Capitalism. Capitalism optimizes for the best management of capital, not for talent or productivity.
To reduce this to a fundamental level, if two entities - A and B - comprise the entire global economy, and entity "B" consistently achieves a greater increase in capital for a given unit of time, B's share of global capital will approach 100% as time approaches infinity. This is true regardless of disparity in starting capital.
In practice, it's not at all surprising that a small number of people end up controlling a large majority of wealth - in fact, if this were not the case, I would strongly suspect a forceful market distortion existed. This is not a bug. It's a feature.
That said, in practice, entities do not consistently achieve the same ROI over time. Families acquire wealth, companies form and are dissolved, fortunes are made and lost. There is a balance point that is reached where there are a relative few rich and powerful peoples/companies/families, and members of this group come and go even within a single generation