The numbers don’t add up

A simple way to see for yourself the flaws of capitalist reasoning, is to create a spreadsheet which calculates the cost of a hypothetical scenario. What makes this conclusive, is to pick a hypothetical scenario which represents something the world desperately needs, but is complex, difficult, and time consuming to plan and execute, so it needs a lot of support to get it off the ground.


So in our hypothetical, here’s what we’re going to say …

  • A person has been working unpaid & unfunded on ideas that originated from earlier thoughts 3 decades ago;
  • So much of the hard work has already been done, and you’re effectively getting all this work for free;
  • The world desperately needs the outcome of this work, whether financially profitable or not;
  • But to take it any further, you need to fully fund this guy over a period of 3-5 years;
  • So during this time – to allow him to focus & have the tools he needs – you’re going to provide him $10,000 per month, earning 10% interest per month, calculated monthly but only added quarterly;
  • But he’s not going to generate any revenue during that time, because he’s still working alone;
  • A few physical assets will be gained, but most will depreciate in value over that time …
  • … and you’ll end up with a debt situation well in excess of $17,000,000.

Yup … that’s right. Just to support one single guy – who’d already done a lot of the work unpaid & unfunded – no lavish lifestyle, just a place to live, food, bills, and tools paid for … no massive team to rely on, no travelling around the world on a weekly basis in a Lear jet … just one fucking solitary guy.

This amounts to an investment of well less than 1 million dollars (about $600K over 5 years) turning into nearly 30 times that amount. So this isn’t some kind of extravagant funding arrangement, it is TINY in the venture capital world.

NOW … the venture capital world actually knows this, which is why they have no such expectation … instead, they’re looking for on average a 2x to 5x perhaps peaking around 12-15x return on their money over a period of 5-20 years, but understanding that somewhere between 1/3 and 1/2 of their money will be lost on bad investments, or otherwise failed projects; about a 1/5 to 1/3 might do barely better than break even, and they need to make up the difference on the projects that are successful.

But either way you should notice something … at no stage has any of this acknowledge the basic premise that we started out with:

The world desperately needs the outcome of this work, whether financially profitable or not

Think about that … we need this, but the economic paradigm didn’t fund this guy for the vast majority of the time, and wouldn’t have known how to … then after he miraculously kept working on it anyway, it still doesn’t want to fund him unless he submits to an abusive level of debt, or for others to take the vast majority of the benefits out of it, in complete disregard to his years or decades of prior sacrifice.

So why do you think the world is falling apart when this is our economic paradigm … isn’t it just a natural consequence of a system this stupid? It is really quite amazing capitalism ever achieves anything at all when this is how dysfunctional it is … and what you should also be able to imagine, is how this system is consequentially the cause of more opportunity lost than gained, not to mention all the ecological and social destruction caused by all this so called “value extraction”.

Only an idiot would support such a system … it needs to go.

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