Rethinking Capitalism

November 25, 2018 James Heinsman In the News

According to a Gallup poll, about 51% of the US population say they are opposed to capitalism. Only 34% labeled themselves as capitalists, while 15% said they did not know.
Paul Tudor Jones II presented this data to his audience at the Greenwich Economic Forum in Connecticut in mid-November and used it as a starting point to discuss the urgent need to re-invent capitalism, so it fits into modern values.

Jones is the founder of the hedge fund Tudor Investment, and one of the pioneers in the industry. Jones is not alone in his quest to develop a kinder, responsive economic system. In Los Angeles earlier in November 2018 Ray Dalio agreed with Jones. Dalio spoke at the Summit conference, stating that capitalism is “basically not working for the majority of people.”

Dalio and Jones pointed out the rampant inequality which now exists in the United States.

“Wealth disparity is the single most threatening social problem we face as a country,”

Jones said. In that way, “the US unfortunately leaves the rest of developed world,” and “you can kind of see the fissures that come from that.” Forbes estimates that Jones’ net worth is in the vicinity of $4.5 billion.

Jones is not just talk. He is also trying to help the situation. In 2013 he was a co-founder of JUST Capital, which ranks corporations on how fair or “just” they are. JUST asks corporations if the pay a living wage; what kind of products are made; how do they treat their customers; and more.

The highest ranked companies were then placed in an exchange traded fund which was launched last June. So far the ETF has lost money, but may be making a comeback; since January until now the fund did better than the Russell 1000 index by one percentage point. Jones is not deterred. He sees proper behavior as good business:

“If you think about it, if I hire great people and pay them” and give my customers good service, “that’s pretty damn good business.” He added, “It can’t just be shareholder profits.”

Recently there has been a surge in more responsible investing. So-called ESG investing is one the rise, incorporating concern for the environment, social and governance issues into the company’s business model. One example would be a business decision not to destroy the shared environment in pursuit of more profits.

Paul Tudor Jones. Tudor Investment, Ray Dalio,

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