Hedge Fund Billionaire Wants to Redefine Capitalism

June 17, 2018 James Heinsman Hedge Fund News

Paul Tudor Jones, billionaire hedge fund manager, says the 50-year-old definition of capitalism coined by Milton Friedman is outdated in today’s world of the mega-rich.

According to Friedman the “social responsibility of a company is to improve its profits.”
But Jones says that this definition needs updating.

“When Milton Friedman said that, tax rates had just come from 91 percent to 70 and income inequality was one-fifth of what it is today,” he said. “You can see how it was relevant at the time but fast forward to where we are today. It’s a different deal.”

Speaking on CNBC’s “Squawk Box,” in a rare interview, Jones said, “Capitalism may need modernizing. In 1985, 35 percent of nation’s wealth was owned by the bottom 90 percent. Today, they own 23 percent, and that 12 percent has gone to the top.”

Jones is the founder of the Robin Hood Foundation, a group that is working to end poverty in New York City.

One example of this re-thinking of capitalism is the upcoming launch of a new exchange-traded fund which focuses on social impact. The launch of the fund by Goldman Sachs uses a model from Jones’ own foundation, Just Capital. The model ranks businesses on parameters like employee conditions, environment and products. Just capital watches a selection of Russell 1000 companies, including Apple, Amazon and Bank of America.

Jones believes that the new ETF might one day challenge the benchmark US stock index.

capitalism, Just Capital, Milton Friedman, Paul Tudor Jones, The Robin Hood Foundation,

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