"In the long run...."

I think I have figured out the real method of how capitalism works. I am no commie, or a bleeding heart liberal, or a left-leaning Marxist, for that matter. I have personally greased the wheels of capitalism, and partaken of some of its fruit. But even I have to admit that its workings are definitely strange.

The whole thing started with  my thinking about Big Data. You would be sleeping under a rock, or imitating Mr. R.V. Winkle if you have not heard of Big Data recently. At its simplest, the whole big data industry is basically a set of analytics, tools, hardware, software and people who are using massive amount of computing power and resources to analyse the exabits of data produced every day. The question is – who is producing the data, where it is coming from? Well, it is Facebook, and the Twitter firehose, Youtube videos, the Large Hadron collider spewing out galaxies of data, the billions of emails… And, who is doing all this. Well, all of us – the billions using Facebook, and Twitter, and WhatsApp.

So, here is this capital creating companies which exhort all of us generate mountains of data, and making this firms wealthy beyond imagination (Facebook’s $100bn IPO, WhatsApps $19bn). And then there is a different set of firms, the Big Data guys, being created to analyse and deconstruct this data… Create a large companies which create these big data problems,  and make money out of it; next create companies that solve them, and make even more money out of it. It is a perfect money making scheme.

Take healthcare, as another example. 90% of our diseases are created by us – obesity, cancer, depression, cirrhosis. And there is enormous profit in that. And then, the same system goes ahead and creates another set of businesses, which go ahead and solve these. Pharma firms, with their humongous R&D budgets. Hospitals. Biotechnology and Genentech. Obamacare, anyone?

There are myriad examples: create millions of cars, and then make millions of miles of roads and traffic systems to manage them. Warm the earth, the temperatures rise; create an entire air-conditioning industry, with each AC blasting a hole in the ozone layer when it is working. And that warms the earth a little bit more, it gets hotter, so more ACs, and so more global warming… It is a glorious self-fulfilling prophecy. The Law of Conservation of Wealth, unlike the Law of Conservation of Energy, does not seem to work…

I was a student when I read about John Maynard Keynes. I could not understand his Keynsian Theory of Economics: to wit, he said, break a window and then employee people to repair it. Break it again, and re-employ them to repair it again. Ad infinitum. That is how you create wealth, he said. I did not understand it then, I understand it perfectly now: it is the very basis of capitalism.

Keynes said something else though: “In the long run”, he said, “we are all dead”. Now, that is something capitalists like me still need to understand….