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Capitalism wants you to remain poor

Keith Tan
September 18, 2018
Capitalism is at its very essence, the private ownership of the factors of production. Entrepreneurs form companies to assemble the factors of production and produce goods and services. Entrepreneurs and investors own these companies. And the companies make a profit. The profits are distributed to the entrepreneurs and the investors. If they are truly successful in business, they will have more money than they can spend in their lifetime, and they pass these profits onto their heirs.

There is a class of people in every society who inherit money, in varying amounts of course. The trouble with capitalism is that the “rich get richer”, not by virtue of their skills, but by virtue of their money. They just need to invest this wisely, in a “diversified portfolio”, and the high probability is that their wealth will be preserved and probably grow.

If you are born without such an inheritance, then tough luck to you. The structural odds are, you will remain where you are. You own no factors of production. But there is one factor of production you do own – yourself. Thankfully, most societies have outlawed slavery. Now the problem is, even though you own yourself as a factor of production, the likelihood is that you will remain poor. Maybe you will afford a house, a car, and raise your children but you will never be “rich”.

Here are 3 reasons why:
1. We are conditioned to believe that our role in life is to be an employee.
Everything in school teaches you how to be a good employee. We are taught skills that make us employable. We are brought up in a system that incentivizes us to follow rules. To the vast majority of people, the idea and conception of being an entrepreneur is a non-starter. It is brushed off as too risky.

2. We are conditioned to believe that society is meritocratic and that hard work guarantees success.
In school, we are told that hard work creates results, and it appears that things are distributed to those who have the greatest merit, those who have had the best grades or results. We believe that society works in the same way. We are lied to. We are not told that society is neither fair nor just. We are not told that there is a class of heirs who need no merit to achieve success. They were simply born with it.

3. We are conditioned to believe that there is a safe path in life to follow.
One of the biggest rules we are incentivized to follow is that good grades get you a good job. We are made to believe this is the safest path to follow. Again, we are lied to. We are not told of the difficulty retrenched executives face. We are not told of how graduating in a recession can seriously dampen your earning potential for the rest of your career. We are not told that shifting economic trends can render us useless, no matter how good our grades were in the past.

None of those above reasons had anything to do with you not working hard, or not getting good grades. You will remain poor under capitalism because you simply do not truly understand Capitalism. Capitalism is a structural system that perpetuates the success of those who already have capital.  For the rest of us, we are conditioned with a set of false beliefs that keep us in our place.

 The question I pose to you is – “what are you going to do about that?”

PS: This is an opinion piece by Keith Tan, Group CEO of Wonderlabs. Wonderlabs is the leading service provider helping companies build and manage software development teams in Indonesia and Vietnam. Across our various shared and dedicated centers, we have over 350+ active software developers. Since our founding in 2015, we have grown rapidly through innovation and our relentless mission focus - Connecting you to success and productivity. Alumni of Wonderlabs have gone on to work at some of the biggest companies in Southeast Asia.

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"I started Wonderlabs because I experienced the problems of building and managing a distributed software development team in Indonesia from 2011 to 2015. I wanted to make it seamless and frictionless for companies to build and manage teams. On the other hand, I found that there are so many amazing software engineers in Indonesia and Vietnam and wanted to connect them to employers in Singapore, Hong Kong and Jakarta" - Ivan Chang, Executive Chairman, Wonderlabs Group

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