What’s Wrong with Capitalism

Published on
January 4th, 2019
60 minutes

What’s Wrong with Capitalism

The Interview ·
Featuring Jonathan Tepper

Published on: January 4th, 2019 • Duration: 60 minutes

Jonathan Tepper of Variant Perception believes that capitalism is the greatest economic system in history. However, he argues that in the United States, the rise of monopolies and oligopolies have created a grotesque form of capitalism in which the heart-beat of competition has been destroyed. Tepper sits down with Roger Hirst to discuss his new book, “The Myth of Capitalism,” and to outline just what went wrong and what can be done to re-ignite the flame of competition. Filmed on December 17, 2018 in London.


  • AH
    Andy H.
    16 February 2019 @ 05:29
    i'm a minute in but I personally have felt that the gig we have now ain't the capitalism that I signed up for. I keep thinking of the quote that a capitalist will sell you the rope to hang him by. it's all turning me into a socialist. which I am not, but this system is bloody broken.
  • DM
    Daniel M.
    29 January 2019 @ 09:15
    Great interview, although as pointed out in some of the other comments it seems to me that all of the issues outlined here are largely downstream consequences of the fed's easy money policy. M&A can only be done at this level with cheap borrowing and low rates. The immense profits used to buy politicians and write friendly legislation to drive out competition can only be done because of easy money. The effects of the plunge protection team, QE, and negative real rates all drive up asset and stock prices further enriching these giants. Additionally a lot of these firms can only get so big in the first place because they become wall street darlings (facebook, google, amazon, tesla etc), which borrow tremendous amounts at nothing, a source of capital which smaller competitors simply don't have. In a world with no interest rate manipulation and endless fiat money printing, a lot of this comes crumbling down.
    • DM
      Daniel M.
      29 January 2019 @ 09:18
      In short, to paraphrase Billy Clinton, it's the fed stupid!
  • zy
    zhang y.
    23 January 2019 @ 20:14
    The title of the video is misleading, Capitalism is an idea, and the one that societies need, other thing is that between the system growths some bad grass, which is what Jon means
  • WD
    William D.
    21 January 2019 @ 11:18
    The only problem is that this book and information won’t be distributed to a wider, mainstream audience. It grapples with the global economy’s #1 enigma, the US Philips Curve, and cuts to the core of Western democracies and values and the drift since Teddy Roosevelt’s time. Has a more impactful synopsis been so neatly bound, recently? A mainstream For Dummy’s version could be dynamite. The only disappointment was the soft ending... don’t worry, a generational leader will come and save the day soon! Yeah right... pitchforks instead of Trump votes is the most effective action.
  • DA
    DAVID A.
    19 January 2019 @ 14:43
    I live in Israel, 10 years ago we used to pay 10-15 times more for cellphone services, then we had a law passed which removed regulations regarding entry to the market, and after new firms entered, our cellphone bills went from 100$ equivalent to 10$ today. The state has heavy regulations regarding mergers and acquisitions, and essentially you will not be able to sell a controlling stake in a large firm to your competitor.
  • DS
    Darryl S.
    19 January 2019 @ 12:06
    Fast talking Tepper is a wealth of sharp analysis.. Bright AF and well seasoned in the fundamentals that guide markets. I am a trade union official and he offers a great deal to workers bred cynical by the regulatory capture that has seen competition stymied by wage reducing monopolies.
  • OC
    Otto C.
    16 January 2019 @ 05:24
    Excellent interview! This is a serious problem which has caused a lot of social problems and I am hopeful that Jonathan Tepper's efforts will increase awareness and ignite the flame for all of us to get involved and make change happen.
  • SD
    Stephen D. | Contributor
    15 January 2019 @ 07:46
    A really good piece. Jonathan Tepper has thought deeply about a very serious problem, and is erudite and articulate about it. It's far from a new problem. Adam Smith observed in The Wealth of Nations "“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The fact that Washington aids them in doing so is troubling, Mr.Tepper is clearly right in both diagnosis and cure. And kudos to Roger Hirst for a first rate job as an interviewer who had clearly done a lot of preparation and asked some probing questions. I really enjoyed this.
  • JB
    Jason B.
    7 January 2019 @ 20:22
    I have been saying for years that more entrepreneurship and competition is needed. More free market forces and more capitalism not less. However, the surveys in the US say that most adults prefer socialism now. One of the major problems, and I know this very well living outside DC for many years, is how difficult it is to compete in many industries. Bureaucrats, rules, regulations and red tape make it a nightmare for small players who have good ideas and could innovate to even think about competing. And then there's the cost of obtaining patent protection. The patent issue is a complicated one. There's free market Libertarian patent lawyers like Stephan Kinsella who think that all patents should be eliminated and companies should compete on other grounds. Like providing superior customer service, better value for the product or service, etc. Kinsella argues that patents in many industries are actually drastically slowing down innovation. Also, a dirty secret is that many federal government bureaucrats in the DC metro area now make close to double (or more than double) what the average private sector entry level job makes with Cadillac health insurance and a nice retirement pension. Many of these bureaucrats also cannot be fired even for committing a felony. Basically they have to be caught in hidden video by a Project Veritas undercover investigative journalist bragging that they are intentionally doing something else on the taxpayer's dime and/or committing a felony. And then that level of shame and embarrassment might be enough to get them fired by their federal government agency. But it is very, very tough to get a substantial raise in many private sector jobs nowadays without working over 60 hours per week and having no life outside of work. And if you work 60-100 hours per week for many years in a row the odds are that your health is going to fail after awhile.
    • DR
      David R.
      11 January 2019 @ 15:07
      A bloated public sector and army with rich pensions was also the root cause of the collapse of Rome. The US is on the exact same path and it's around the 8th inning or so. Princeton Economics' Martin Armstrong has a shelf life for the US, the year 2032. Then it's all over. Seems plausible.
  • SL
    Seth L.
    7 January 2019 @ 20:48
    No question that Mr. Tepper is exceptionally brilliant. However, I find it bizarre that regulation is both the problem and solution to eradicating cronyism. "Better bureaucrats" is not the solution because any system that gives economic power to a political class will always remain vulnerable to corruption. The solution is the complete separation of politics and economics, which is in fact what capitalism actually is. Laissez faire capitalism is a redundant phrase and, as Kashyap S. notes, has never been fully implemented. That, IMO is the solution.
    • DR
      David R.
      11 January 2019 @ 14:57
      Hong Kong is the closest thing to real capitalism in the world. And it consistently ranks #1 for economic freedom year after year in the annual Wall Street Journal ratings. It's now also home to more billionaires and UHNW individuals than any other city on earth. I had the great fortune to work there in the 1990's, and then moving back to america felt like going to the old Soviet Union in comparison. Sadly, things have since gotten worse in both Hong Kong and the USSA, and almost everywhere else too. I think we will have to first crash-and-burn under marxist socialist policies before getting back on track. The clueless millennial brats, at least in the west, are a bunch of collectivist socialists likely to crash-and-burn the global economy. But maybe there's hope for the next, reactionary generation after them.
  • BB
    Bullionaire B.
    11 January 2019 @ 00:56
    Find it interesting that there was not one in the interview nor comments below, an utterance about central banks and the monopoly on legal tender via laws. Cut out price of capital monopolies and you are striking at a large point of the source.
  • JL
    Jim L.
    6 January 2019 @ 22:13
    I am a fan of Tepper but I see the synopsis lacks any mention of the fact that capitalism and specifically, the idol of growth at all costs is largely responsible for the complete degradation of the natural world. Can anyone tell me if he bothers to address this issue or is this simply a discussion of the flaws of a human construct and its potential effects on other human constructs?
    • DS
      David S.
      7 January 2019 @ 07:34
      Your question is valid, but IMO it is a human nature question. Under any political/economic system humans can destroy the world because of greed and indifference. Under every system we need to see the consequences and improve the planet for all. There is no reason that this cannot be a common effort under all political/economic systems. But it may happen anyway. DLS
    • Mb
      Matthew b.
      7 January 2019 @ 11:57
      It’s a human thing. I agree with this guys reply. Capitalism and responsible capitalism are two different things. And because money means so much to people it’s difficult to stay moral and ethical in business. It’s sad but true.
    • EF
      Eric F.
      7 January 2019 @ 23:55
      There is some place for government to recognise this and via incentives put motivations in place for companies to address. I think this is an area where the EU has been better than the US.
    • JL
      Jim L.
      10 January 2019 @ 21:56
      Agree with all your retorts thank you. I guess I could have explained in more detail but yes I agree it is a human thing. We are competitive and tribal by nature which necessarily leads to a desire to get more and specifically more than our competition, on whatever level that may be. Capitalism in its current form is not working, especially for the environment. Incentives are the right way to go. Unfortunately, altruism isn't in enough abundance in human nature to appeal to that. It needs to become economically advantageous for companies and people to change their behavior to arrest the rapid decline we are experiencing. I'll leave you with these disturbing statistics... 60% of EVERY species of mammal, bird, fish and reptile has become extinct in the last 50 years due primarily to humans taking their habitats (UN). It's time we asked the hard questions about what we are doing to this earth that we rely on to survive. Thanks for the replies.
  • dm
    dude m.
    10 January 2019 @ 02:27
    Great interview! The questions were well thought through and positioned well. I think we need to give thanks to the production editor of this video. It seems very seamless, but I suspect that a lot of time was made in editing this video. Thank you so much, RealVision! Another home run!
  • LE
    Loui E.
    9 January 2019 @ 04:51
    What do you guys think of CVS health merger with Aetna for 70 billions? Is CVS going to create healthy competition against Amazon in the future? Thoughts?
  • DK
    Daniel K.
    8 January 2019 @ 13:37
    Shall US avoid “Social Democrats” willing presidency and senate in 2020 - it should be credited to Jonathan’s timely book. Hopefully it opens enough eyes to the real root cause of inequality and save us from looming populist and subsequent disaster...
  • KS
    Kashyap S.
    7 January 2019 @ 08:11
    The only thing wrong with capitalism is that it has never been tried yet. People need to look up definitions before writing whole books on a topic.
    • JA
      John A.
      7 January 2019 @ 12:59
      That is pretty much the premise of his book. Tepper is saying that what we have now is not really capitalism. He argues that we should try it a bit...
    • KS
      Kashyap S.
      8 January 2019 @ 05:46
      @John A, no he is not. He is arguing for more regulation of some industries and less regulation of others. Basically wants to shuffle the deck chairs, nothing to do with capitalism
  • DW
    Doug W.
    8 January 2019 @ 04:55
    Great interview!
  • LV
    Liam V.
    8 January 2019 @ 04:36
    Great questions Roger.
  • PG
    Philippe G.
    6 January 2019 @ 23:17
    Highly relevant topic these days. Great interview!!
  • PJ
    Peter J.
    6 January 2019 @ 21:32
    Excellent interview
  • BM
    Beat M.
    6 January 2019 @ 20:55
    Thanks for that one! The pendulum will swing back and then swing back and then... Don’t try stopping it, move with it, as one should, especially in times when it just so seems to hang weightless in midair, ready to reverse and smash you in the face
  • SS
    Stephen S.
    6 January 2019 @ 20:24
    Very well done! Tepper said that Warren Buffett "is a monopolist at heart." Virtually all people who run large for-profit enterprises are, too. That's the irony of capitalism--it needs competition to provide a price-setting mechanism, but the players strive to increase market share and minimize competition.
  • pd
    peer d.
    5 January 2019 @ 19:22
    Roger is a great interviewer in that he asks intelligent and penetrating questions then lets the interviewee answer without interruption.
    • SS
      Stephen S.
      6 January 2019 @ 20:18
      Excellent observation!
  • WM
    Will M.
    6 January 2019 @ 19:16
    Just excellent!!! We are truly in a place in the US today where corporate monopolies are gaining ground rapidly. This has been happening for a while and the crony capitalism and government corruption is the reason. Unfortunately neither Republicans nor Democrats will address this issue. Therefore collapse is the most likely outcome as political change will now only come by social disturbance and / or 3rd party challenge. Indeed the political monopoly of the 2 parties in the USA are in fact a greatest "duopoly" out there. Not enough people are asking where this is all leading but I know many RVT viewers are just as concerned as I am. I hope folks are preparing for the coming generational and social conflicts......
  • MM
    Mike M.
    6 January 2019 @ 17:50
    Very good, would like Real Vision to have more interviews with authors on markets, macro economics, and related sectors? Would you consider Edward Griffin author of The Creature From Jekyl Island? Thank you, Mike
  • DR
    David R.
    5 January 2019 @ 13:01
    The four freest economies in the world (https://www.heritage.org/index/ranking) are in order: Hong Kong, Singapore, New Zealand, Switzerland. All except NZ are also the richest countries in the world, far richer than the US, with significantly higher average salaries and much higher average net worth. Free market capitalism works. US-style crony capitalism does not.
    • IH
      Iain H.
      6 January 2019 @ 06:25
      I am from NZ, IMHO NZ suffers from many similar issues of industry concentration the two most obvious are supermarkets where there are two chains and very high food prices and banking in which four Australian owned banks make up by far the biggest share of that industry. There was five banks until the government allowed one big bank to buy another... go figure. Interestingly the Bank the brought its competitor now has a former PM as its Chairman. I have no idea if there is a relationship but the optics are appalling.
    • DR
      David R.
      6 January 2019 @ 09:08
      Yeah I think that HK and Sgp are light years ahead of NZ and the West in terms of free markets, except for the property situation in HK.
  • EN
    Eric N.
    4 January 2019 @ 16:06
    If the problem is government regulation creating artificial monopolies, artificial barriers to entry as well as corporate welfare, isn't saying "we shouldn't allow for..." (here he says 'below less than 6 players' per industry) the proposal of a government solution? Wouldn't the right approach be to simply limit the power of government to be involved at all? Strangely, he seems to understand this perfectly in "Is Regulation the Answer?", but forgets about it in "The Golden Era" where high antitrust enforcement is the go-to strategy. A monopoly, or a group of corporations controlled through horizontal shareholding, which raises it's prices in a free market increases its vulnerability towards the competition. Logic would suggest that with limited government involvement the competing market would then regulate itself.
    • AC
      Andrew C.
      6 January 2019 @ 05:37
      My understanding is regulate to limit take-overs (for example Google and Ad-Click) and not much more than that. This makes sense to me but the question becomes "how?". Trump has the balls to do something like this, just not the brains nor inclination.
  • MB
    Matt B.
    5 January 2019 @ 23:57
    Excellent interview - good to see someone outlining an intellectual case in favour of "little guy" capitalism.
  • JY
    Junyi Y.
    5 January 2019 @ 22:56
    I wish all my graduate econ courses are taught in this fashion. Very engaging discussion. Great job guys.
    • JY
      Junyi Y.
      5 January 2019 @ 22:59
      I especially enjoyed topics around M&A and the competitiveness.
  • AP
    A P.
    5 January 2019 @ 21:33
    Trump's latest tweet (01/05/2019): "Drug makers and companies are not living up to their commitments on pricing. Not being fair to the consumer, or to our Country!" Timely indeed.
  • JX
    Jack X.
    5 January 2019 @ 20:33
    Amazing interview. One thing that seems to be missing or at least should be briefly mentioned is nature. The bigger the company is, the more power they have to extract relentlessly from natural resources. They can exploit politicians and pretty off destroy Mother Earth for their own benefit. This problem obviously goes beyond just big corporations but the type of capitalism we have right now definitely exacerbates this.
  • JH
    Jesse H.
    5 January 2019 @ 16:46
    Don’t want to beat a dead horse, but now that I’ve gotten to the end, I have to say: this was truly excellent. Thank you, Jonathan, and well done Roger - thoroughly enjoyed this interview.
  • JH
    Jesse H.
    5 January 2019 @ 15:20
    Brilliant and makes complete sense. Thanks guys.
  • gg
    georgy g.
    5 January 2019 @ 13:20
    Brilliant and very important
  • HK
    H K.
    5 January 2019 @ 12:07
    Tepper is sincere in his beliefs, but it somehow feels wrong to introduce more regulation (how many companies in an industry, what is defined as an industry, who can buy and not buy what in an industry) to solve problems caused by a lot of regulation in the first place.
  • SP
    Sat P.
    5 January 2019 @ 08:45
    This is without a doubt one of the best interviews ever on RV. It also just goes to show how true free markets are the key to prosperity.
  • BS
    Bevyn S.
    5 January 2019 @ 06:01
    Wow! Jon absolutely knocks it out of the park. He is incredibly articulate and very informed. The increasing trend toward monopolization is concerning and I am glad RV brought one of the best minds in to discuss the topic. It seems to fit into the macro puzzle quite brilliantly. Keep it coming!
  • BP
    Bryn P.
    5 January 2019 @ 03:29
    Good content, unfortunately hard to hear audio podcast until summary at the end .
  • DS
    David S.
    5 January 2019 @ 02:18
    The best comment for me is that regulation needs to be simple. I would add regulation needs to be transparent. This is extraordinarily difficult. Both sides of the legislation try to tie the hands of the other side with complexity. It would be a benefit if there were monitored feedback loops to tell if the legislation is working and how it might be changed. DLS.
  • RR
    Robert R.
    5 January 2019 @ 01:41
    Very powerful. A clarion call. Either reform happens or something potentially much more ugly. I wish Gabriel Kolko was still alive. I remember reading his history of regulatory capture, The Triumph of Conservatism, back in the '70s. Jonathan has taken the analysis to the next level.
  • AG
    Asim G.
    4 January 2019 @ 21:05
    Great interview. He's done the best job of articulating the problem with crony capitalism of anyone I've read recently. Big change coming over next decade.
  • LJ
    Lucille J.
    4 January 2019 @ 19:30
  • DJ
    D J.
    4 January 2019 @ 18:51
    Why does he need a pen, when there is no paper?
  • TJ
    Terry J.
    4 January 2019 @ 18:14
    All credit to Jonathan, who is both a very clever, and caring strategist, for highlighting and articulating so well a problem that most of us have sensed has existed for a very long time. I really hope his book, as well as the publicity he gains through videos like this, results in many more honest people recognising the extent to which crony capitalism has grown, to the point where it could conceivably soon kill the golden goose, resulting in a potentially worse world for everybody. Unfortunately you only have to read the history of capitalism in the US to (for example "The Creature from Jekyll Island") see that the problem had been growing out of control long before 1982, and goes all the way back to the industrial tycoons of the 19th century in oil, banking, steel and other major industries, resulting in effectively some thirty or forty very wealthy families essentially controlling everything directly or indirectly. This of course ultimately resulted in the infamous DC swamp, with almost every major American politician of the last century having to bow to the will of this powerful group. As a glass half full man, I would love to think that excellent insights like Jonathan's might eventually help rid the free world of this cronyism, but realistically it will be extraordinarily difficult and probably require too many honest as well as brave politicians, prepared to genuinely effect the will of the people they are supposedly representing instead of their real crony masters. Happy New Year!
  • TJ
    Terry J.
    4 January 2019 @ 17:57
  • CC
    Christopher C.
    4 January 2019 @ 17:12
    Poignant and salient thread from Stacy Mitchell on Amazon's strategy and tactics that directly reinforce the points being made by Jonathan in this interview. https://twitter.com/stacyfmitchell/status/1081176811659243520
  • RM
    Ron M.
    4 January 2019 @ 14:40
    Sadly, America has become a corporate lie. Over 100,000 "special interest" lobbyists help negotiate the retroactive payouts. The system works for 0.001%, while the rest of Americans are pissed at paying taxes for our third-world government, infrastructure, education and healthcare. I do think we will have blood on the streets before things change for the better. The good thing is Americans are pragmatic and hopefully that's not too rough of a period. The risk is this debt crisis strangles us in slow motion and it takes decades for that change to happen.
  • GL
    Geoffrey L.
    4 January 2019 @ 13:00
    As a dyed-in-the-wool capitalist, love this man and he's spot on. And look at where Amazon put there two new headquarters - the global seat of politics and lobbying Washington, DC (effectively) and the global seat of finance and money (i.e. the global seat of politics and lobbying) NYC. All those people hoping and wishing it'd be Dallas or Nashville, hah, yea right. They're playing the monopolist game.