Ruchir Sharma - What Went Wrong with Capitalism? | Prof G Conversations

[@Yourmission9]

In my humble opinion lobbying is assisting in destroying the American dream. The numbers themselves far outweigh who we have in congress. Roughly 12,000 lobbyists total are going to get their agenda across, and I would venture a guess that maybe 1/10th of those are of the common citizen’s interest

[@baffinsansterre]

Lobbying place ''concentrated benefits & diffuse costs" at a higher level.

[@jamaalgill2740]

1/10th is even an overestimate. Id guess 1/100th

[@jamesmassey2089]

Overlooked: Prioritizing profit/efficiency maximization has led to the destruction of system redundancies which provide safety paths against failure and a larger number of income opportunities for citizens who face becoming an underclass without them.

[@steadfastanddomino]

Not sure I understand why an overabundance of tech sector lobbyists (which I agree are too many) is more pernicious than a overabundance of ANY sector of lobbyists. We are certainly not over-regulating business; we are under-regulating business in a meaningful manner. We have a wad of elderly, wholly ineffective legislators paired with a load of uneducated, child-like partisan politicians who are entirely unable to function as a governing body.

[@waynelondon9776]

I think one of the key ingredients relating to the dissatisfaction of many folks in the economic system is the lack of participation in the formation of wealth. The top 1% have accumulated much of the gains. Proper progressive taxation and reinvestment in infrastructure, education and health care will change the sentiment!

[@georgewoods5543]

Sharma also makes the argument that in western industrialized nations, the governing incumbents have lost 85 % of elections in the last few years. He attributes this to the economic stagnation experienced by the majority of households, especially the young. While GDP and stock market growth has been strong in the US, the share of national income (GDP) flowing to households has decreased relative to the share to business and government. Increasing the share of national income through a combination progressive tax reform and reduction of business subsidies/bailouts would boost GDP via growth in consumer spending .

[@ethanadkins5638]

He says overregulation leads to pro-incumbency and pro-big business to the detriment of the startup. That's true. But why is that happening? The reality is that the democratic systems we have constructed hold a contradiction. Government regulates business for many reasons but the most important one being to make a fair and level playing field for competition. Business relies on that and plays by the rules to succeed by giving a good or service that adds value to people's lives with a return in profit. Overtime, the businesses that are most successful start to realize that lobbying becomes a greater source of future return than anything else. Politicians goals are mainly to get elected and stay in office. Businesses lobbying government and help fund their campaigns while the politicians give them an unfair advantage in the form of new regulations. The contradiction is that the profit motive leads to distorting the level playing field. What I have just described is crony capitalism, and there is nothing in our democratic capitalist systems that can stop it. If what I am saying is at all intriguing then you all should check out Michael Munger at Duke University.

[@daykeviful]

Amen!

[@christinebell37]

ABSOLUTELY

[@videomakville]

Absolutely. People generally think what you have described is a bug or glitch in the system. It's in fact a feature of the system. Politics and politicians are forever cozying up to economic might. Their elections cost a lot of money, the money comes from somewhere (the people who have it) and it's not free money, THERE ARE SO MANY STRINGS ATTACHED!😊

[@prasvasu4217]

Best comment on this video!

[@steveboyd3455]

Right. Now layer on top of that, international global trade and the fact that countries don't want to play by the same rules. Example China.

[@Toomanydays]

I like the pixelated Mona Lisa.

[@wOLF-DS]

Good to listen to two of my icons talk. Topic and Talk was amazingly interesting.

[@trudysellers3644]

Interesting that when Richie explains things I can follow it all, as a lay person, whereas with Prof G it isn’t anywhere near as accessible.

[@hazonrotbart8]

It’s much more difficult to increase productivity in a services based economy than a manufacturing based economy. With our economy increasingly being services focused over the last decade no surprise that productivity growth has slowed. On the flip side the ups and downs of a services based economy are usually smaller than a manufacturing economy. Pros and cons I guess

[@morinc75]

"regulations tend to favor the big players", yeah wonder why! maybe we should look into that no? This guy's entire roundabout argument can be resumed to "money in politics".

[@BTrain-is8ch]

The result would probably be a disappointment. I'd wager that most people vastly underestimate the amount of "common sense" regulation people actively support that ultimately serves as a barrier to newcomers in the space. Example? Regulations around building real estate. I heard recently that depending on where you are in the country 1-200k of the cost of building a home comes from regulatory compliance and navigating the legal processes. Who wants to compete to build "affordable" houses when you know from square one that you can't even begin to build for less than 1-200k?

[@JiraTicket-zz6bh]

I was passively listening til Ruchir mentioned Greece. My dude you have no idea what you are talking about. The average Greek is starving while walking in 2 jobs. Most of the middle class have left the country. The rest have become bargaining chips between the government and 2 billionaires.

[@Larimerst]

The premise that the neoliberal era has been qualified by over regulation is laughable at its face. Tepid GDP growth since the GFC (the Silent Depression) has more to do with stagnant wages, unchecked monopolies and a massive upward transfer of wealth than a lack of "productivity" of American workers, who, aided by technology, are considerably more productive than they were decades ago but don't have the wages to show for it.

[@thomas6502]

"Two" many incumbencies? I'm reminded of a song from my youth by a group called the Cult. It went something like "he's gone crazy trying to tame the American horse..." I loved the imagery as a teen of unbridled opportunity--as an adult that wild horse feels like trampling governments in need of taming. Here's to hoping the American horse can both retain its powerful inspiring presence (people, innovation, aspiration to serve humanity) and to do so without crushing the struggles at the genesis of invention.

[@dixiebrick]

We shouldn’t wait for thousands to die before we regulate either. Bhopal anyone? Unregulated AI? Yeah good luck with that.

[@dixiebrick]

Better deficits than surpluses. A red state in the south has a 50 billion dollar surplus and declared it their own. In other words they stole 50 billion from the taxpayers and laughed all the way to the bank.

[@23billd]

Not one word about raising taxes on the top 1%

[@Kingromstar]

That won't fix it. If they taxes every single American for everything they have then the government will still in debt into their eyeballs. They're indebting people that don't even exist yet with their spending

[@baffinsansterre]

Guess for who he works.

[@golfinguru11]

Chairman of “Rockefeller International” a private wealth management firm for ultra-high-net-worth families. lol.

[@lindsaykimbrough8260]

They did in a way talking about capital gains taxes.

[@cglavin]

@@lindsaykimbrough8260 lol

[@imkindofabigdeal4308]

Churn is good. But churn won't happen if we combine bailouts with over-regulation of startups. There is little incentive for changing the status-quo in an environment of regulatory capture and incumbent-driven lobbying.

[@Trials_By_Errors]

Only way to Raise Productivity is High Interest rate and end of free money.

[@mdecav]

One of the first stats Sharma mentions is 3,000 new regulations each year. How many of them are on new industries that didn't previously exist? We have a growing economy and new industries are created all the time so of course there will be new regulations.

[@deepomouli]

The point that Ruchir makes about concentration in stock market is not unique to current market.This has always been the case.In an index of 30 stocks,it is 10 - 15 stocks which are giving 80% of gains.

[@Aortadetroit]

22,000 + views and only 502 "likes" gives me some hope in our future.

[@jawsh5628]

I really liked his big book and wrote my undergrad thesis on it. I don't think he did a good job initially framing his argument for fewer regulations. He should have said that we simultaneously need more anti-trust regulation for market leaders and fewer regulations of for small businesses. And i don't think he really drove across the point the system that we currently have in place was designed by those who benefit most from it due to the pervasive nature of legalized corruption in the United States. He spoke at length in his book the importance of the corruption index. Then I didn't like how his first idea for curtailing government spending was slashing social security and welfare. That's the first thing you want to cut when the Defense Department and the broken healthcare system are right there? And there wasn't a single word about the individual tax structure. The top 1% don't contribute their fair share and that is also by design.

[@edisonbrain]

Lots of left vs. right debate in the comments about inequality. It’s an important topic and unfortunately globalization and immigration from poorer countries doesn’t help this factor. Debate forces us to look harder and deeper at the facts. If the volume of regulations has increased, where has it come from? Are explicit regulations a substitute for common law judgments in courts? Remember our constitution is the thinnest in the world but it doesn’t mean we don’t have other laws and court judgments which substitute. So if you pop something out, does it just get substituted by something else? I don’t know but wonder if his book has this level of analysis. More light will be shed on this topic for sure with Elon and Vivek looking at this. I do think this guy is spot on about the fiscal deficit in the U.S. They are super high right now and without justification after Covid, since there is no recession. Politicians are not worried about it because this has not created a crisis yet. It may create a very big one in the future especially in the next recession.

[@Rahul-ki8ps]

Why is this guy's interview just 28 mins? Usually the interviews go on for much longer

[@okkomp]

28 mins was too long

[@zeruchofficial]

His whole schtick could be reduced to 2.8 minutes

[@fanemanelistu9235]

The usual "socialism and government are bad; unfettered capitalism is good". Yawn!

[@bastroman4845]

This does nothing for my young male anger and the disrespect for my labor is felt.

[@jtkrause]

He lost me when he said that there's not much we can do about population growth declining. How about government incentives to have kids? Like: national healthcare, paid time off, government funded daycare.

[@akcj875]

Govt should not be controlling birth rates or deaths. This govt messed up economy...

[@Varun2799]

@jtkrause which developed country has increased its fertility rate with the solution you're saying? None

[@jtkrause]

@@Varun2799, there are many European countries with high fertility rates that also have generous child-care policies.

[@Varun2799]

@@jtkrause name a few please. Also give your definition of "high fertility rate"

[@augustoliver2779]

I think most Americans are clueless about what life is like outside of America. Making a living abroad is so much harder than in the US. Yes, the US has its problems, and life here used to be a lot easier than it is now, but it is still better than all the countries in Central and South America, Africa, the Middle East, and most Asian countries.

[@steveboyd3455]

The problem is us, citizens. We want everything, all the services that government can provide. And we don't want to pay taxes to pay for it. It's called greed. So the problem is not capitalism, it is democracy and the fact that politicians who want to be elected are keen to respond to that greed and do provide services and don't press for taxes, and thus we run up large debts.

[@RS-lv1cm]

Dude , people are fundamentally greedy and there is nothing wrong with that . If everyone was so smart and everyone was able to make good decisions what is the point of having government ?

[@parkmannate4154]

Historically, his argument is bunk. The government was much more active in the 1950s and 60s, and productivity growth was much higher than today.

[@jdaglish2975]

Perhaps you should get on some hetrodox economists such as Steve Keen, Richard Murphy, Michael Hudson, Richard Werner as an alternative viewpoint. The current mainstream idealogical neoliberal economics has been a failure for the vast majority with less growth than in 1950 Keynsian times.

[@paxdriver]

This is what drives me insane about interviews: one guy chews up a clock without even a basic level of common sense. Comparing productivity growth with the health of an economy is absurd if the population is changing, human/environmental rights are being enforced, lobbyists aren't the same threat as corrupt politicians who take their bribes, and tax policy changes have given awys trillions yet big-X industry is whining about regulations costing a few hundred grand after their $2 million dollar subsidies to reward them after cornering their respective markets. 9:51 "oh, oh, what happened to capitalism, it must be productivity down", well that or we're making it harder for slave labour or prejudice wages? Socialism isn't a bad word, we don't speak in extremes in academia. Socialism just means that government is in control (not necessarily command, just controls over, same as weapons makers, drug makers, food suppliers and porn publishers are supposed to be controlled by popular opinion. Socialism doesn't mean communism, it means if you take from public resources like oil, air or damage public resources like water, right of way, or cause spread of disease, then socialists suggest the government ought to have authority of control just like a drivers ed instructor with that wheel and brake they can override in case of emergency.) This is lunacy economics, rentseeking at its most repugnant. Bailing out FDIC is moral hazard, share buybacks after 2008 is moral hazard, forcing profit sharing pension plans or ta nation for unearned income equal to earned income, or consumption taxes on PPE taking the burden from low end income taxes of individuals and single parents. Child care and health care so people are capable of being more productive without dying early for it. There are studied and measured responses to all of this man's opinions and yet his "research suggests....". No, it doesn't. Lol

[@NichoD3]

This guy is full of crap. Corporate/CEO greed has ruined capitalism plain and simple. I’m sure this guy would probably be in favor of “trickle down economics” too.

[@Kingromstar]

He is saying that... It is going to the incumbents via stock buy backs vs. new productivity features etc.

[@prasvasu4217]

This is purely an idealogue comment... Even worse than the interviewee

[@anthonyjasi7528]

This guy really knows how to talk so much and still say nothing at all.

[@maverickmusic101]

Ha ha

[@Vivaldir]

Aah here we go again.. you should watch Joe Rogen… 😂

[@Kingromstar]

"keeping alive dead wood" is nothing?

[@MayorMcC666]

its just the "bullshit jobs" thesis again

[@tonyoramos1]

He can say a lot but please consider that he cited the most important growth trends and statistics (or lack thereof) in the world and gave clear reasons why he thinks they are downturned: excess regulation, govt borrowing and population decline

[@DanielSmith-sl3pv]

I totally agree with need to address USA debt/deficits down to a total of

[@goldilockszone4389]

P/E (price to earning) ratio of companies in US is 23 in China its 10. How is this sustainable ? By the way India is also over priced at 22 - Data from Ruchir Sharma

[@tayaramecanici]

Ruchir Sharma got his education and wealth from the Congress party. One of his team chasing Indian election is Swaminathan Aiyer, he is older brother of Mani Shankar Aiyer, all same goons in the congress. These brothers mother taught in Doons in Dehra Doon, where Mani was Rajiv Gandhi mate. You know the rest about Ruchir Sharma, Paise mein paida aur Rockefeller is for investment in India going forward. He brought into Rockefeller last year.

[@neurodivtries4101]

What is wrong about Ruchir's credentials with anything you said?

[@Ayushmohan.]

What nonsense are you taking !?

[@peteg6118]

Can you imagine the exploitative nature of our economy and society if government did not regulate the commons. The notion that regulations in general should be curtailed to enhance growth focuses too narrowly on economic growth over protecting the wellbeing of our society. I believe we need common sense regulations even if that slows growth because humans tend to do stupid shit.

[@VijayPawar-sz6gq]

👌

[@Kingromstar]

I like this india guy a lot, sure he is promoting his book but he the foundation is sincere. He seems to genuinely care.

[@2596mr]

I am from India and he is one of the good economists when it comes to Indian system as well and has pointed its flaws out multiple times.

[@nmk5003]

This strikes me as a complete non-analysis of the current state of the global economic system, I would encourage anyone who watches this podcast to read The Knowledge Economy by Dr. Roberto Unger. It offers a far more prescient analysis of malaise affecting our time and a far more convincing critique of why growth rates have dropped globally.

[@zeruchofficial]

The volume of regulatory rules is less telling than what they do. Complaining about the number of regulatory rules without assessing their efficacy or span of influence is a pointless, and based on his statements, bordering on intentionally disingenuous, especially where you consider "cost of doing business: is added to to keep bad behavior from occurring. You could make an argument for simplification of a lot of regulatory measures (e.g make all fines intentionally punitive based on revenue volumes such that 'cost of doing business' becomes 'cost of losing the farm', break up 'too big to fail' institutions, and put bad actors in federal prison) and put real teeth in them, and I suspect things will clean up pretty quickly.

[@dee-jay45]

I know Prof G dodged the issue but it's a very real issue problem that the USA usually attracts the best, brightest and most ambitious immigrants from all over the world, whereas Europe mainly attracts refugess from all the failing nations it is surrounded by. And this is something Americans fail to understand when assessing immigration elsewhere.

[@MehdiSyed456]

The whole capitalistic idea was very short sighted. China has proven how it can be easily undermined by state subsidies, they have been very successful in insourcing entire industries. Not to mention, Capitalism doesn't pay much heed to environmental destruction or basic decent human moral justifications!

[@henrychen8779]

China is not "capitalist" like the U.S. is. The CCP does a lot more than undermine the private sector, they can without due process, take full ownership or fully kill a company. Sure the U.S. can split up companies like Standard oil or AT&T but someone like Jack Ma went into hiding for a while after he pushed his opinion on the CCP. He then has his IPO (highest valuation for any IPO at the time) cancelled. All you need to know is that 70% of global equity is in the US stock market (wsj), while foreign investment in higher end services have fled the Chinese market. Where China went wrong is their evolution from post WW2 to now was inorganically forced in too short of a time frame. Farmers moved to the cities for manufacturing caused a massive food shortage and famine. Unlike western industrial revolutions that took ~ 100 years. This has in turn led to great wealth undeniably, but now an over educated middle class youth who cannot find jobs (21% youth unemployment). And lastly ofc the one child policy and the declining birth rate. You will need laborers for an economy that was based on manufacturing, and enough to support social security programs.

[@atg1962]

I read Sharma's previous book, The Rise and Fall of Nations. He is little more than a shill for Wall Street Ideology. Disappointed that Scott would give him the platform.

[@Lekin1234]

Ruchir should clarify whether he is talking about legal or illegal immigration.

[@guptaajay]

empire always fall sooner or later, it is a lifecycle. There was always a reason that cause it.

[@raos4987]

High govt spending is pointed as the main reason why capitalism is not doing well in America and the west. Also higher regulatory interventions from Govts is another reason. In old classical economics of Keynes times govt spending should step in if the private spending doesn’t fuel the economy for higher growth. For instance in just ended pandemic period Govts had to step in to give cash doles to people as most of them have lost jobs. But most of the money hasn’t been spent but ended up in savings. So the intention of keeping economy running through uninterrupted spending has suffered. India that way managed pandemic spending by not encouraging cash doles. Rather it supplied food grains, covid vaccines, etc free to nearly 80% of its population. This way it did not overshoot its budget deficit.

[@samarthbagwe1736]

India just achieve 8.2% economics growth Indi in the past have achieved 10% economic growth We need long term yearly consistency

[@trails3597]

Canada has more ultra-rich/capita than any developed country (excluding city states). This means more oligopoly billionaires than most but they are not flashy.

[@MetaPhysStore0770]

Why : government intervention How : government intervention Who : lawyers and lobbiests When : government regulation Where : government regulation

[@peterhar74]

High property prices ensure that young people remain poor

[@Rojosi]

Sharma is on point regarding issue of Gov intervention and low productivity as key issues in AUS. Current Gov policies are steadily eroding opportunity for anyone looking to start a business or company. Min. wage is now $24.10. Largest no. of company liquidations in 10yrs, building industry collapsing while desperate need for housing, energy costs unsustainable, 30+ companies delisting from ASX and majority of jobs created this year from sectors directly off Gov subsidied sectors like aged care and health. Australians are happy to contribute to better overall society until their standard of living is impacted, socialism works when someone else pays for it.

[@ywtcc]

Historically, the rate of return on investment was nowhere near as high. You'd take a small loss due to inflation, or thievery, and you'd be happy with it. It doesn't actually make sense for piles of money in the economy to grow faster than the economy, over the long run. In order to get an equilibrium, all the investors motivated by profit need to be replaced with investors motivated by loss aversion. The jokers that want to abuse the monetary system created by government, with no government intervention, are gangsters, and have no business with the government. The problem with Capitalism is the same old story, greed, criminality, poor arithmetic, and lack of civic virtue.

[@SunilKumar-tj8rp]

Has the world become too complex to find one solution fit in terms capitalism versus other system

[@AndyWallWasWeak]

anyone who controls the spending? MIC consumed trillions, took talents from tech and healthcare sectors, yet the world is more unstable, and no political accountability for that. too late now to cut spending when the world is falling apart, see demographics, climate change, nuclear/global war. actually more efficacy is needed from government AND higher spending

[@juson4267]

most of the analysts and economists look through a profit lens. They ignore a lot of latent benefits.

[@sukhdevsohal5172]

Well-done Ruchir Sharma. Capitalist critiquing Capitalism. Karl Marx must be laughing out.

[@mazenct]

Thanks Scott for the remark on what kind of immigrants compared to France .. I felt like an immigrant when I studied my mba in Pennsylvania (Bethlehem).. my best teachers were American, Indian, Korean,… not sure we get these motivated people.. some of them yes.. but definitely not the same profile on average.. and that’s even before considering religion ..

[@shubhamkumar-fi3pd]

He had said only two or things useful and just master on creating stories

[@andybaldman]

All the smart people know how to be critical of capitalism

[@Long_Tail_of_Finance]

What I didn't hear from the author: 1) how does America compare to other countries in terms of rules & regulations 2) an acknowledgement that some of the rules & regs came about because businesses took advantage of customers. Overall I felt this book was based on junk journalism, appealing more to sensationalism / sentiment surveys and relying less of data and comparisons across other countries. What does this guy want? Unfettered capitalism running roughshod over consumers so that we can go back to the days of Adam's Smith's version of mercantilism?

[@brodobroggins]

Low quality guest. Has absolutely no actionable suggestions when asked.

[@BuhodePiedra]

We extort our own selves. It’s greed. We can do better.

[@brianlund1089]

Not sure why I'm seeing this guy everywhere when it sounds like he's just pitching neoliberalism. That system has been in force globally for 40+ years, only to be questioned in the last 5-10... I feel another wave of concern trolling about the debt coming. Of course it's something to be concerned about, but none of these clowns ever propose revenue, it's always spending cuts.

[@burgerbreath]

Sorry Scott, I can’t even finish this interview. Your guest insufferable lol

[@owls077]

Please remove the X (Twitter) handle. The account belongs to some other Ruchir Sharma.

[@drekmastermind]

What a weak interviewee

[@jaywise991]

"I saw what socialism did" - Like put me through college and enabled me to have this job...🙄

[@asafh04]

What does he have to back up any of his talking points?

[@lilfluff758]

pixelated mona lisa is so sick

[@altaccount4590]

he sounds like an apologist for most right wing policies. also, nobody ever talks about how crucial illegal immigration is for the economy.

[@user-ic6xf]

Once again, the problem is government.

[@mark-tj7my]

Drop 200 billion from the military budget

[@easterntechartists]

This guy is clueless to the max about non English countries. So much covert facts

[@okkomp]

He seems very confused

[@adriennefried5368]

Capitalism is the only economic system that can produce affluence and abundance if not regulated.

[@henrytep8884]

Left unregulated it leads to even worse outcomes. That’s how you get “gilded” age.

[@jamesmassey2089]

Simplistic truisms cannot be applied correctly to a complex system. Falsehoods are inevitable.

[@cyndiluewho3286]

He's saying the American government needs to go through a crisis, but what he's really saying is that the American government needs to collapse... right? I mean, how many crises does our country need to go through before the government makes the necessary changes in order not to collapse?

[@biswajeet9826]

No😂😂 You're reading way too much "between the lines"

[@hyperflys]

This guy knows nothing - just wants to sell a book.

[@playmaker4053]

save 40mn of ur time, let more indian migrant in, india numba one, china falling, india+usa=win lets go fellas

[@OGTonyB]

This guy was not very good. 👎🏼