The Myth of Capitalism

Published on
April 2nd, 2018
32 minutes

The Myth of Capitalism

The Expert View ·
Featuring Jonathan Tepper

Published on: April 2nd, 2018 • Duration: 32 minutes

Jonathan Tepper of Variant Perception was perplexed by the lack of U.S. wage growth and the breakdown of long standing relationships with other economic indicators. Digging deeper, he found that the odds were stacked against the employees, consumers and suppliers by the rise of industrial concentration. This was a trend that provided a clear investment opportunity. To compliment the video, Variant Perception has given Real Vision subscribers access to a special report at Filmed on March 23, 2018 in London.


  • KS
    Kashyap S.
    20 April 2018 @ 12:50
    I like watching the videos while I'm doing stuff around the house but recently that has become an ordeal thanks to this ear-piercing and annoying music. I literally have to run towards my desktop to turn the volume down, wait, turn it up again once the interview starts. I don't mind the annoying music, but please turn the volume level down!!
  • LV
    Luís V.
    12 April 2018 @ 14:49
    I sure can´t understand what myth Jonathan is talking about. Is the myth the idea that US economy (or any economy for that matter) is a capitalist economy? And so Is not a free market. Is that it? If so I can´t understand how Jonathan relates that conclusion (there is no free market capitalism in US) and the need of market and anti-trust regulation. If one studies the 1800 and the begining of XX century in the US, one can see that the efforts made to regulate competition and to regulate trusts made the situation even worse for workers and customers. To this last point "The progressive Era" from Murray Rothbard is crystal clear (and with a lot of historic references and data) as to that negative impact. It was the big players that massaged the politicians to pass regulation to interfere with market dynamics. And then came the trust problem. In need for more regulation and interference. The book has a lot of data on that and on different sectors (prices, wages and patents). On the other hand, is Jonathan saying that its impossible to have a capitalism system? A free market at all? There should be a follow up on these matters. Even with other guests. Cheers.
  • DC
    D C.
    10 April 2018 @ 19:55
    The music is not just annoying, it's actually deleterious. Our brains don't multi-task well and require 2-3x the time to return to concentration from distraction. The world is already full of distractions, we sign up to RV with the aim to get some signal with the least amount of noise- figuratively and literally. Think how much time is wasted for us to rewind a segment just to get back into the zone due to the music. RV is not MTV, nor a cutting edge production house. We want information and insight from generally reserved, introspective to the point of dull, experienced money managers (hopefully with great performance.) No need to jazz it up. Suggestions: Ocean wave or rain forest sounds, or silence in between questions would be better.
  • JC
    John C.
    3 April 2018 @ 16:51
    Great video - very interesting. Still, it's funny how US regulators always seem to do the wrong thing at the wrong time. They over-regulated the banking system with Dodd-Frank (after stupidly loosening them for many years) and killed small business banking. And helped create the mortgage crisis with Fannie and Freddie and the government's 'good intentions' to equalize the housing market that allowed banks & mortgage companies to lend willy-nilly to almost anyone who wanted to buy a house. Let's not even talk about the Fed but it would have been interesting to hear how the cheap money has helped the strong get stronger and box out the little competitors and caused massive inequities in the process and tons of malinvestment.
    • MA
      Mark A.
      10 April 2018 @ 15:07
      Spot on. When we were looking at M&A patterns a couple of years back it was just cheap money fuelled growth for the already huge. Now that's great for them but they were also just buying and warehousing disruptive businesses and taking the scale competition out at the same time. Bad for the market. Bad for consumers.
  • AS
    Alex S.
    2 April 2018 @ 13:50
    I feel like the intro music could do with being slightly quieter, I find myself having to turn the volume back up after pulling it whilst the music is playing
    • GF
      George F.
      2 April 2018 @ 15:16
      The intro music is too loud, while the volume of the actual video is too low. The volume on the video player only mutes when I click on it.
    • bm
      brian m.
      2 April 2018 @ 18:33
      Ive been thinking that for the last few interviews..and Im glad you brought it up..I don't know how your comment is described as "hotly debated" when everyone so far agrees with you
    • MT
      Michael T.
      9 April 2018 @ 11:04
      Maybe a new sound design which is less "invasive" would do the trick.
  • WM
    Will M.
    7 April 2018 @ 14:05
    Good interview with some interesting points made by Tepper. He has done a lot of research andI think most of his points seem sound. I really feel his comments on Titans made so much sense. It feels like competition is getting far too concentrated in fewer and fewer hands. Oh and the music issue has been raised many times now. An easy thing for RV to fix. Just turn the volume down folks!!!!
    • WM
      Will M.
      7 April 2018 @ 14:18
      Sorry on the music volume issue, I do see RV HAS turned down the volume during the interview segment changes, THANKS a lot for that! The intro / ending music just needs to be adjusted as well. We are not watching RV for the music.
  • PP
    Phillip P.
    7 April 2018 @ 11:48
    Get rid of the stupid music
  • PP
    Phillip P.
    7 April 2018 @ 11:47
    Excellent You need to follow up on this presentation with dialogue about data collection, usage rights ....Face Book just blew its moat.
  • AD
    Alex D.
    6 April 2018 @ 17:45
    Why on earth is the hype music necessary in the intro. Just give me the goods.
  • RA
    Richard A.
    5 April 2018 @ 03:12
    The looping audio has been happening to me for months listening from the website. Reloading doesn’t always help. Somewhat maddening. Switching to the RV app makes the problem go away, but it shouldnt
    • TB
      Tim B.
      6 April 2018 @ 15:28
      Same here...
  • RA
    Richard A.
    5 April 2018 @ 03:16
    app froze in the middle of the comment lol. But the website shouldn’t have the audio problem regardless.
  • KS
    Kim S.
    3 April 2018 @ 11:07
    The research into the specifics is great. What is really troublesome is the title and the suggestion that capitalism is causing the problems. No monopoly was ever built without government help. As a small business owner I can say that the big corporations are taking over my industry more easily largely because of regulation and secondarily because of loose monetary policy and leverage. Health Care regulations have made it particularly difficult to keep employees in a small business.
    • KS
      Kathleen S.
      4 April 2018 @ 22:31
      I have a question -- why is it that health care insurance is tied to your job??????? Car insurance isn't, home insurance isn't, life insurance might be, but many people get their own. I think if we disconnected health insurance from jobs it would do 2 things -- FREE people to quit or have a voice at abusive jobs practices without worrying about how to pay for health insurance and two lower the cost of health insurance because now you would have more individuals making choices. Of course this is all depends on not allowing Health Care Insurance industry from cutting country up into regional monopolies where you only have choice of expensive plan from company 1 or cheap plan that covers nothing from company 2.
  • TB
    Tim B.
    3 April 2018 @ 03:01
    Does anyone else have trouble with the audio download? It seems to start fine, then a few minutes in it loops back to the beginning.
    • RM
      Ritwik M.
      3 April 2018 @ 16:46
      Working fine for me
    • RA
      Robert A.
      3 April 2018 @ 20:04
      Yes, I had to reload a few times due to the looping.
    • TB
      Tim B.
      4 April 2018 @ 02:40
      Yea, this has happened now on multiple audios in a row...sigh. RV, any ideas how to resolve?
  • RA
    Robert A.
    3 April 2018 @ 20:03
    Excellent piece. Having been a Berkshire inverstor for decades and read every Annual report I am quite familiar with the Buffet/Munger Moats and Barriers to entry themes, but never made that last jump to Jonathan’s thesis. The Railroad and Big 4 Airline purchases should have lit the bulb for me, but it took RV to connect the dots. Societal implications, quality of life and Privacy concerns clearly result from Jonathan’s thesis and I can only believe that investment opportunities will be reflected as well. Nice curation again Milton!
  • GL
    G L.
    2 April 2018 @ 22:40
    Great interview - interesting insights from Jonathan. It would have been interesting to see a chart of US wage growth vs the anti-trust/M&A cycle just to spell out the link. On depressed wage growth: there is also the issue of the collapse in the oil price in 2014, resulting in the loss of high-paying shale oil jobs that were absorbed into lower-paying alternatives. Also, just because an industry is concentrated, doesn't entirely mean that wages are suppressed as there is competition for labour from all sectors. On innovation being lacking in monopolies: that is the accepted logic set out in economics textbooks, but there is also a counter-argument that because monopolies/oligopolies make super-normal profits, that they have the financial muscle to invest in long-term R&D - something that is broadly out of the reach for actors in a perfectly competitive industry. This means that certain concentrated industries may actually innovate more, not less, industries that are prospectively competitive.
    • GF
      Gordon F.
      3 April 2018 @ 18:49
      One of the main reasons that monopolies don't innovate as much is the problem of the "installed base". That is, if a large portion of your profits come from a particular product or technology, and you have invested extensively in marketing and supporting it, then new developments that would disrupt it are blocked from ever moving out of the development lab. Incremental improvements to existing products are numerous, but technological leaps are not. For example, Kodak helped develop the technology for digital photography, but it fell to others to market it. And there are LOTS of other examples. Sadly, there are an unknown number of technologies that are developed, either by monopolies who patent and suppress them, or by startups who are then bought out by the monopolies, with their patents, and the developments are buried, at least for a while, in order to protect the installed base.
  • VS
    Victor S. | Contributor
    3 April 2018 @ 16:52
    Well done -few comment on this point. However it should be “called the acceleration of the trend to Corporatism “ and economic fascism. Capitalism ended in 1913.
  • RM
    Ritwik M.
    3 April 2018 @ 16:47
  • RM
    Ritwik M.
    3 April 2018 @ 16:45
    Good one
  • SP
    Sat P.
    3 April 2018 @ 09:25
    The points raised here from his research was awesome. I couldn't understand the wage rise issue either given that the labour market is tight, but it makes so much sense. I can't see big tech being regulated any time soon, but it definitely needs to be.
  • GC
    Gary C.
    2 April 2018 @ 23:56
    Fascinating perspective, great deep dive research, awaiting your book.
  • JH
    Jesse H.
    2 April 2018 @ 20:31
    Excellent - very thoughtful and insightful piece. Please bring him back!
  • JH
    Joseph H.
    2 April 2018 @ 20:13
    RV has a monopoly on original content and I'm damn happy they do. It's just too bad RV can't crowd out all the blather that passes as cogent commentary. Still, the observations and assertions Tepper makes are hardly original. Counterpoint- the makeup of the S&P 500 sure looks a lot different than it did at the turn of the millennium, though GE shareholders wish it weren't so. The Orwell quote is worth remembering, 'whoever is winning at the moment will always seem to be invincible' As for capital vs labor, labor tapped out long ago. Long live the 13 week vacation, no co-pay health insurance, DB plan and lifetime employment.
  • MK
    Michael K.
    2 April 2018 @ 19:30
    Has this guy ever been bullish on anything??
  • PB
    Pieter B.
    2 April 2018 @ 18:42
    Thanks a lot for your great presentation Jonathan!
  • KS
    Kathleen S.
    2 April 2018 @ 17:59
    This is not a phenomenon at all -- it is what you call a neo liberal agenda --- this is what happens when your governments have been basically captured by banking and billionaire business elites. Warren Buffet actually hates capitalism (or maybe he and Charlie Monger don't understand it, I find them both to be a disgusting charlatans) because as you said Bershire Hathaway loves monopolies (some not literal but regional for sure). This would lead into why Trump was elected --- will it change? I think there will be an economic crisis before that happens and then we will get an answer to what happens with all this unpayble debt.
  • GF
    George F.
    2 April 2018 @ 15:15
    The myth of capitalism, should that be: The Myths of capitalism or The myth of the free market. What he describes is the way capitalism is supposed to work. I personally don't think a discussion of the 00s without bringing up the war financing is possible. During past wars, wage and price controls kept wages for the masses moderated. There is also the issue of nonsalary benefits like the very expensive medical care in the US. Anybody care to speculate about the Kentucky teachers' strike over the changes to their pensions.?
    • GF
      George F.
      2 April 2018 @ 15:36
      A quibble, returns of concentrated vs non concentrated industries. If you are back testing, what you might be doing is comparing lists of past out performers vs past low performers and declaring the out performers concentrated. That should not work as the shares should be priced with industry concentration priced into the stock already. Why did rational investors not take industry concentration into account?
  • TJ
    Terry J.
    2 April 2018 @ 13:28
    Always a pleasure to listen to Jonathan's thoughts on markets, and learn from his instructive insights.
  • PM
    Patrick M.
    2 April 2018 @ 10:41
    Thanks for a very interesting presentation. I found the ideas presented timely and relevant, and potentially value creators. For the admin: the black boxes displayed in the video for the purposes of sharing text, at least on my viewing, were blank. Thanks very much to all and well done Me. Tepper.