Capitalism with a Floor and a Ceiling

The basic problem with capitalism is that “the poor get poorer and the rich get richer”. In other words, the two poles are linked through an inverse relationship–as the total pie increases, the share of the pie that the poor get decreases over time, until you reach massive inequality and then have a crisis.

What if instead, there was a ceiling on how much money someone could earn, that was tied to the minimum wage, so to make more money as a CEO, you would have to raise your worker’s pay. And the same for capital gains, which would be progressively taxed and then recycled into a universal floor i.e. a UBI. That way, growing the pie would help everyone evenly. The rich would not be allowed to outpace the rest, but would have to bring everyone with them. The policies would be designed so the proportion of the pie for each segment of society would be fixed, so everyone would be incentivized to increase the total pie, not steal your neighbor’s slice through wage theft, stock buybacks, and inflation.

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