Ray Dalio plugs for inclusive capitalism, a global ideology which encourages the public and private sector to invest in ways that extend the opportunities and benefits of an economic system to everyone. “The American dream is lost in today’s world” said Ray Dalio, the billionaire founder of the hedge fund Bridgewater Associates in an online video chat with Sal Khan.
The American dream “does not exist” right now and that if leaders don’t act, the whole economic system of capitalism could collapse warned Ray Dalio in April.
Indeed, much of the world is currently emerging from the 2020 pandemic great lock down with a great deal of apprehension, uncertainty and fear about what the future may hold. Hoping for the best but expecting the worse may be prudent. The V-shape recovery has failed to materialise, and what comes next from the great lock downs is not pent up demand but pent up aggravation, as I correctly forecast. So civil unrest could be the next chapter to this current jaded system.
“The American dream is lost in today’s world”
Ray Dalio plugs for inclusive capitalism could not come at a more appropriate moment in history
All the ingredients for civil unrest are present, high unemployment, masses of people disenfranchised and poor, a political system that caters for the few at the cost of the many, massive wealth inequality aided and abetted by unprecedented monetary easing (even central bankers have admitted this on the record). The tinder to set off civil unrest in the US was the abhorrent video which went globally viral of a white officer, Derek Chauvin, holding Floyd down in a knee choke hold (known as deadly force) for eight minutes, despite the victim saying he can’t breath several times. “The ‘knee on the neck’ is a metaphor for how the system so cavalierly holds black folks down, ignoring the cries for help. People don’t care. Truly tragic” Tweeted former US President Barack Obama.
But Floyd’s cries for help could have also sparked global anti-lock down protests and it is as if critical mass has awoken, people are beginning to see the status quo as a boot stamping on a human face, to some extent we are all black.
“the ‘knee on the neck’ is a metaphor for how the system so cavalierly holds black folks down, ignoring the cries for help. People don’t care. Truly tragic”
Ray Dalio plugs for inclusive capitalism is warning what lies ahead if the wealth pie continues to be gobbled up by a chosen few, leaving the many with just crumbs if they are lucky
The world’s billionaires have more wealth than 4.6 billion people, moreover their wealth has consolidated in the pandemic 2020 pandemic great lock down.
With such income and wealth inequality, we no longer have capitalism instead we have a plutocracy, a self serving elite class whose power is derived from their wealth.
We wrote in a piece, Ray Dalio warns next recession could trigger social unrest back in January 2018
“If we do have an economic downturn, I worry we will be at each other’s throats” said Ray Dalio. More than two years later and we have near great depression levels of unemploymnet in major economies and greater unequal distribition of wealth.
Civil unrest is yet again on the global radar as Ray Dalio plugs for inclusive capitalism.
“Corporate leaders need to declare wealth inequality a national crisis, and policymakers and business leaders need to come together to find solutions” – Ray Dalio
In Italy, Orange vest protestors have taken to the streets of Rome and Milan protesting the economic hardship the lockdown has brought, with thousands of businesses forced to shut leaving families without income.
‘Here are people who don’t eat’ said one protestor from Bergamo. ‘There are people who have not taken a salary for 4 months. We are hungry. They made us die’
France’s anti-government “Yellow Vest” protesters defied a ban on mass gatherings to protest against the government’s austerity.
We had to come and mark the day to tell Macron that we’re still here and that we won’t accept his pension reform” said one pensioner.
Latest reports show Paris police brutality protests turning violent. There are also protests in Hong Kong and Brazil.
Ray Dalio plugs for inclusive capitalism entails the CEO’s of big businesses declaring wealth inequality a national crisis and coming together with policymakers to find a solution
“Corporate leaders need to declare wealth inequality a national crisis, and policymakers and business leaders need to come together to find solutions” said Ray Dalio.
If you don’t have a situation where people have opportunity, you’re not only failing to tap all the potential that exists, which is uneconomic, you’re threatening the existence of the system, and I think that’s coming to home very clearly with the downturn in the economy with this virus” said Ray Dalio.
Ray Dalio plugs for inclusive capitalism is also about making access to education and training more accessible for low income households
Ray Dalio believes that policymakers needed to take steps to increase access to education and boost incomes for low-income Americans, who have been disproportionately affected by the coronavirus pandemic.
“The American dream became lost or it certainly does not exist when we take education, for example” he said.
“We can see there is not just a wealth gap; there’s an opportunity gap and a productivity gap. And it’s a problem” – Ray Dalio
Education spending has a big influence on a student’s success. Ray Dalio cited research that showed students who come from families earning less than $20,000 score on average 260 points worse on the SAT scores (out of 1600) than students from families earning more than $200,000.
“And the gap is increasing” he wrote.
A college education also has a significant influence a student’s earning potential. A bachelor’s degree is worth $2.8 million on average over a lifetime: Moreover, holders of a bachelor’s degree earn 31% more than those with an associate degree and 84% more than those with only a high-school diploma, according to Georgetown University’s Center on Education and the Workforce.
“We can see there is not just a wealth gap; there’s an opportunity gap and a productivity gap. And it’s a problem” said Ray Dalio. “Something’s wrong”.