How Capitalism Gets Off Track

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 4 September 2019

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

How inequitable business models like those in the gig economy can lead to a financial crisis, more regulation, and doubts about the viability of the free-market system.

Topics covered in this episode include:

What is the expanded role of corporations according to leading chief executive officers.
What is the gig economy.
Takeaways from David’s recent experience delivering restaurant meals for Doordash including the huge liability many independent delivery drivers are unaware of.
Who covers the shortfall when the cost of operating a business is less than what consumers are willing to pay for the goods and services the businesses offer.
How more regulation results from businesses unfairly passing on costs to others.
How income inequality and debt can lead to a financial crisis.

Thanks to Policygenius and Sleep Number for sponsoring the episode.

For show notes and more information on this episode click here.

[0:18] Is Capitalism still working for everyone?
[2:12] David’s disappointing gig economy experience.
[6:53] The hidden cost of insurance in gig jobs.
[9:04] Who pays to close the financial gap created by gigs?
[14:27] The pitfalls of the gig economy.
[16:17] What makes capitalism work?
[19:29] Income inequality is a drag on the economy.
[23:09] The importance of calculating the entire cost.
[25:36] How your decisions can impact the health of the capitalist economy.

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Transcript

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0:00.0	Welcome to the money for the rest of us. This is a personal finance show on money. How it works, how to invest it and how to live without worrying about it.
0:10.0	I'm your host David Stein today's episode 267. It's titled Why Capitalism Goes Off Track.
0:18.7	Back when I was in college I worked for a polling company.
0:20.9	We would ask the people we called whether they believe the US was on the right
0:25.1	track or the wrong track.
0:28.1	There's been discussion in this presidential election as to whether capitalism still works for everyone.
0:35.5	Is capitalism off track?
0:37.6	Is there a better system?
0:39.6	I believe that free market system still is the best, but there's some things that happen that get it off track.
0:48.0	Last month the Business Roundtable announced a new statement on the purpose of a corporation. It was signed by
0:55.3	181 CEOs who commit to lead their companies to the benefit of all stakeholders.
1:03.0	That's customers, employees, suppliers, communities, and shareholders.
1:08.0	That's from the press release.
1:11.0	The Business Roundtable is a non-profit Association whose members are the chief executive
1:16.6	officers of major U.S. corporations.
1:20.2	They promise to do their part to get capitalism back on track.
1:25.0	In this episode we'll see what that will actually take,
1:29.0	both leaders of businesses as well as ourselves as consumers.
1:35.7	The statement on the purpose of a corporation, they believe it's the role of business to deliver
1:42.0	value to customers.
1:44.1	Invest in their employees, which they say starts with compensating them fairly
1:50.2	and providing important benefits. The role of business is to deal fairly and ethically with suppliers,
	...

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