Capitalism’s Fundamental Flaw

Sramana Mitra on Capitalism’s Fundamental Flaw

It is the fundamental flaw that our celebrated system rewards speculators much more than creators. A relatively junior hedge-fund manager or a bond trader on Wall Street makes a great deal more money in his career than Charles Kao, who invented the basic physics making optical communication a reality. Dr. Kao, now 73, won the Nobel Prize this year, but his net worth would not compare favorably with that of George Soros.

Yet, who added the real value? Soros or Kao?

In 2009, 30 million people sit unemployed in America. Yet, the speculators have managed to lift the stock market up, and the media pretends that we’re having a recovery.

We’re not having any recovery. We need the innovators, the entrepreneurs, the creators, the scientists, the technologists–those who build value, those who create jobs–to lead us out of this nightmare. Not a bunch of speculators who make money regardless of whether value gets created or destroyed. In fact, many of them are incentivized to destroy value by spreading fake rumors about companies and stocks, and they do so often. Some get caught, most don’t.


Written by maald

November 18, 2009 at 6:48 pm

Posted in Economics

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