This is true, however it's also not an unusual feature - pretty much every capitalist society has the characteristic that those with capital can gain more capital with a minimum of additional work.
Alternatives that don't have that feature to at least some extent would be regarded as very radical, and difficult to implement.
never said capital (or access to capital) doesn't influence value creation. it can negatively or positively affect value creation depending on how that capital is allocated. however the act of capital allocation does not create value. why is that so difficult to understand? im not saying capital allocation isn't important, however its one means to an end (value creation).
> Allocation of investment is the heart of a capitalist economy.
Allocation of capital is at the core of a capitalist economy. That's not what most people in finance are doing. They are speculating with funny money. There isn't really that much actual capital involved; savings rates are abysmal after all.
Capital is not underappreciated - it is hidden by owners. Because their power and wealth comes from control of a scarce, hidden resource. If everyone had access to capital, nobody would be “on top”, and that’s unacceptable to the owning classes.
Capitalism has resulted in us drowning in capital. This seems to me to be a statement about its success, not its failure(s). Would the alternative (scarce, expensive capital) be better?
Capitalism is about the flow of capital. Most people don't have capital, so they have to trade their labor for a small amount with people that do have capital, who are only trading it to get more capital.
Articles like this assume that everything will change - except how capital works.
Bitcoin. Crowdfunding. Distributed banking. Mass market barter transactions.
I can't help but think that centralized stores of capital (i.e. the top layer, the rich, the capitalist, etc etc) are naturally going to become obsolete.
The fundamental problem with capitalism (not just in silicon valley) is that access to capital is what defines winners and losers. Of course I'm being simplistic and there will always be underdog stories, but the reason any company becomes as big as it is, is capital, plain and simple.
The immediate effect of gaining massive capital is tremendous. Outcompeting for both workers as well as getting to market sooner is an obvious benefit. The ability to lobby in government against potential roadblocks of whatever it is that you're doing is another. Just from the word itself, capitalism is rigged for those with capital.
Further down the line though, you are now beholden to this immediate level of investment, and as this article shows, this is where problems arise.
More concretely, access to capital is a function of ones personal/professional network. The greater the divide due to income inequality, the less likely one has access to capital.
This is nihilist thinking. There is no complete barring access to capital, even in the 19th century "middle class" loans were possible.
Today access to capital is as easy as it ever was (except maybe '06). The people who take risks are rewarded and there are countless stories of people moving out of middle class.
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