# Why Capitalist Corporations are Failing and What’s Next (Part 1 of 3) Date: 2024-02-28 Next Part: https://disrael.github.io/blogs/raw/why-capitalist-corporations-are-failing-and-what-s-next.part2.md --- --- ### Why Capitalist Corporations are Failing and What’s Next Social hierarchies don’t have to be zero sum but when they are perceived that way [things get ugly](https://gwern.net/doc/sociology/2022-andrewsfearon.pdf). For instance a more educated populace could mean everyone’s status is raised or it could mean a red queen’s race for greater and greater degrees conferring the same status. ![Charles Ponzi](https://disrael.github.io/blogs/assets/why-capitalist-corporations-are-failing-and-what-s-next-9228c7879b.jpeg) *— Charles Ponzi* Whether education status is zero sum or not has a lot to do with whether degrees are just virtue signalling or represent real skills. So if in some very early human society people go from not speaking language to fluent then all status has increased. Everyone has more prestige as the society prides itself on its language skill. But then likely humans keep creating fancier and fancier language well past practicality. So now the prestige becomes zero sum as the only respect the unnecessarily fancy language can achieve is by displaying some supposed relative superiority, not a real useful skill. And the way to enforce fancy language prestige is by bullying those with simpler language. Under pressure nearly any merit can go through this life cycle from value, to virtue signalling, to bullying. ### Status Ponzi Schemes Status isn’t a material good that can be horded. Once people suspect your status is not deserved only force and dominance can continue your prestige. At this point a status Ponzi scheme can be used. In exchange for their respect offer others a shot at one day enjoying your status — a [power culture](https://medium.com/@disrael/through-the-lens-of-power-cultures-f90a93dae36a) built on fake merit. The problem for the Jeff Bezos and Elon Musks at the top of this Ponzi scheme is making a new generation believe that there will continue to be growth necessary to justify their loyalty. Especially as population growth is slowing and approaching stall. [Jeff](https://www.theatlantic.com/magazine/archive/2019/11/what-jeff-bezos-wants/598363/) of course is aware of this Ponzi scheme: > We can have a trillion humans in the solar system, which means we’d have a thousand Mozarts and a thousand Einsteins. This would be an incredible civilization. By Jeff’s logic our current 8 billion people should have produced many more such individuals than the 2 billion of Einstein’s time or 791 million of Mozart’s. Of course that’s not what happened, Einstein and Mozart are genius for the ages and Bezos, at 60, will be lucky to even end up fondly remembered in his own time. That’s because *individual* genius is a merit that has transitioned from real value into bullying. In a world of group effort a trillion humans don’t have an advantage over 8 billion any more than increasing the size of a single kitchen staff by orders of magnitude will necessarily produce fine cuisine. So as the status Ponzi scheme crumbles we get [variants of dissent](https://ryangosha.medium.com/lying-flat-anti-work-and-quiet-quitting-a-crisis-within-capitalism-843f63f7bfc7): > The criticism has always been directed to social utopias when economists say that under socialism nobody really wants to work. We are witnessing the same things play out under the capitalist mode of production. Nobody wants to work anymore, and the robots are not yet fully here to take over. Ah but the robots can’t ever take over because that will collapse a status Ponzi scheme as well. But even were humanity to take to the solar system and increase their population to trillions that still wouldn’t be enough. Any Ponzi scheme also relies on excluding large segments of the population. ![Mozart’s sister](https://disrael.github.io/blogs/assets/why-capitalist-corporations-are-failing-and-what-s-next-347970fb11.jpg) *Mozart’s sister* Any status partially based on the uniqueness of an individual is going to suffer as people are less unique. As Syndrome of *The Incredibles* quipped, “With everyone super, no one will be.” So unless we become less zero sum and pride ourselves on a society full of Mozart and Einstein as barriers of education, race, gender, and class lift, the status Ponzi scheme still collapses as it is unable to pay out to such a broad base. Americans should feel pride for the creation of Amazon but Jeff Bezos arguably doesn’t [deserve anymore credit than thousands or millions of others](https://medium.com/@furrier/original-content-the-story-of-aws-and-andy-jassys-trillion-dollar-baby-4e8a35fd7ed). > Amazon Web Services wasn’t any one person’s single idea. No proverbial apple fell on some Newton’s head, no Henry Ford or Steve Jobs-like character had a brainstorm. Instead, it rather emerged. The idea grew organically out of the company’s frustration with its ability to launch new projects and support customers. Not that Steve Jobs deserves that much status either as his company mostly just put together the combined output of a generation of engineers and scientists. But unfortunately Americans after the Greatest Generation have trouble feeling this sort of group accomplishment. We didn’t survive a great depression, stop Hitler, or create Great Society programs. The prosperity we created is extremely unequally shared. Even our society’s small attempts at reducing race and gender based oppression are mocked as “woke”. If our society was really capitalist then equality of workers would be embraced for the efficiencies it provides. Glass ceilings would melt away as they only hurt productivity. Instead of being satisfied with capital Jeff Bezos wants the status afforded to an astronaut. He and Elon Musk aren’t capitalists so much as status junkies. Nor does philanthropy appeal to them as it did to [Leland Stanford](https://www.philanthropyroundtable.org/hall-of-fame/leland-stanford/) (though you can see MacKenzie Scott’s philanthropy [here](https://yieldgiving.com/gifts/)). In Leland Stanford’s 19th century a wealthy person would have a private carriage and his children might make an educational Grand Tour. If real space travel were available then maybe Jeff could buy similar status but even then the internet, available for even poor workers, would show you the experience. Philanthropy wise Leland could create Stanford which led to Silicon Valley and arguably changed the direction of the world. What can Jeff or Elon do that would even come close? Capitalism only survives as long as raising capital is rewarded. A private jet, mansions, box seats at sporting events, and trophy spouses won’t cut it. Maybe participation in a pedophile ring would but that seems not to have gone well. Meanwhile the real big ticket items like longevity or a body that a young person would willingly desire are off the table. Ironically such real incentives would require the kind of group effort that status Ponzi scheme capitalism cannot allow. Admitting that group effort exists would further reduce individual status. So the main current reward of capital becomes not participating in the status Ponzi scheme and young people have caught on that even that reward is available to them in part by opting out. From that point of view our current oligarchs can be considered victims of this Ponzi scheme. They devoted their lives to a system promising Einstein and Mozart level of respect and despite their enormous efforts it never came. Even if they now spent all of their fortunes building a coed, top tier, free university as Stanford did, the populace is already highly educated as never before. The not so ruling class, when denied respect, can only bluster by destroying Twitter or starting a failed insurrection. --- **[Continue reading Part 2 of 3](https://disrael.github.io/blogs/raw/why-capitalist-corporations-are-failing-and-what-s-next.part2.md)**