Ray Dalio’s capitalism critique makes for a particularly timely read in this current polarized political climate which makes it feel like we are on the cusp of a revolution.

Probably the greatest current threat to wealth is a revolution, the type that leads to a wealth grab.

Ray Dalio’s capitalism critique, entitled Why and How Capitalism Needs To Be Reformed published April 4 highlights the urgent need for change.

I suppose I became a capitalist at age 12 because that’s when I took the money I earned from doing various jobs like delivering newspapers, mowing lawns, and caddying, and put it in the stock market when the stock market was hot in the 1960s. That got me hooked on the investing game

RAY DALIO

Capitalism is in crisis and at a crossroad, according to Ray Dalio’s capitalism critique

“I think that most capitalists don’t know how to divide the economic pie well and most socialists don’t know how to grow it well” said Ray Dalio.

In Ray Dalio’s capitalism critique the billionaire investor writes “that we are now at a juncture”.

Ray Dalio explains that people of different ideological inclinations will either work together to skilfully re-engineer the system so that the pie is both divided and grown well or we will have great conflict and some form of revolution that will hurt most everyone and will shrink the pie.

Ray Dalio’s capitalism critique sheds light on how he became an investor at an early age.

I think that most capitalists don’t know how to divide the economic pie well and most socialists don’t know how to grow it well

RAY DALIO

“I suppose I became a capitalist at age 12 because that’s when I took the money I earned from doing various jobs like delivering newspapers, mowing lawns, and caddying, and put it in the stock market when the stock market was hot in the 1960s. That got me hooked on the investing game” writes Ray Dalio.

Ray Dalio’s capitalism critique is obviously not advocating socialism

“I’ve had exposure to all sorts of economic systems in most countries and have come to understand why the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raise people’s living standards. It is an effective motivator of people because it rewards people for their productive activities with money that can be used to get all that money can buy,” writes Ray Dalio.

“Being productive leads people to make money, which leads them to acquire capital (which is their savings in investment vehicles),” adds Ray Dalio.

To me, leaving so many children in poverty and not educating them well is the equivalent of child abuse, and it is economically stupid” – Ray Dalio

Ray Dalio’s capitalism critique examines areas that need reforming such as tackling the widening wealth gap and reforming the education system

“Poor educational results lead to a high percentage of students being inadequately prepared for work.

The probability of being incarcerated is closely related to education levels,” writes Ray Dalio.

“To me, leaving so many children in poverty and not educating them well is the equivalent of child abuse, and it is economically stupid” adds Ray Dalio.

Regarding wealth distribution, Ray Dalio writes, “The income gap is about as high as ever and the wealth gap is the highest since the late 1930s, those in the top 40% now have on average more than 10 times as much wealth as those in the bottom 60%”.

Ray Dalio’s capitalism critique explains that the income/wealth/opportunity gap is leading to dangerous social and political divisions that threaten our cohesive fabric and capitalism itself

“Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another. Opposing forces can coexist to make progress or whether they increasingly “go to war” writes Ray Dalio.

TRADING SOFTWARE

Dan Loeb targets Sony. Dan Loeb is an activist investor and founder of Third Point, which oversees about $14.5 billion in assets.

Last year the activist investor viewed Campbell soup as a bargain when Third point reported that the soup maker could fetch a takeover value of $52 to $58 per share.

A year later and the activist investor Dan Loeb targets Sony

Dan Loeb's activist hedge fund Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares, according to a recent report in Reuters.