[FoRK] Capitalism's Fatal Flaw
jbone at place.org
Sun Nov 8 08:42:00 PST 2009
> Mitra's concern is that capitalism's fatal flaw is its dependence on
> integrity in its leaders.
And who, exactly, would those "leaders" be? (The idea that capitalism
itself has "leaders" is inherently flawed, an unexamined premise
suffered by both socialists and to a lesser degree but with equal
It is not "leaders" that reward individuals, it is the market itself
at large. Come up with something novel and useful, do a good job
making and selling it, create value, reap the rewards; that's how
entrepreneurship is "supposed" to work.
The problem with entrepreneurship is, rather, competence (lack
thereof) in most of those that serve as the fertilizer for the "seeds"
of innovation, and in large parts of the dependency network that gets
created in any venture. This problem with incentives, with rewards,
isn't necessarily due a lack of integrity anywhere in particular
within the network; it's that there's simply a higher risk-adjusted
reward --- and more outcome over control, less dependencies ---
elsewhere. This is a consequence of the ineptitude and
ineffectiveness of the entire system from inception to reward,
starting with (but not confined to) the venture capitalists
themselves. The environment itself is too noisy; too often the
signal cannot penetrate.
> Criticize her for confusing a failing of capitalism with a failing
> of capital markets if you will
Thank you; I believe I did. ;-)
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