TED Salon Brightline Initiative
Bhu Srinivasan: Capitalism isn't an ideology -- it's an operating system
Filmed:
Readability: 4.2
1,103,540 views
Bhu Srinivasan researches the intersection of capitalism and technological progress. Instead of thinking about capitalism as a firm, unchanging ideology, he suggests that we should think of it as an operating system -- one that needs upgrades to keep up with innovation, like the impending take-off of drone delivery services. Learn more about the past and future of the free market (and a potential coming identity crisis for the United States' version of capitalism) with this quick, forward-thinking talk.
Double-click the English transcript below to play the video.
00:12
So, what is capitalism?
0
881
1166
00:14
Capitalism, fundamentally,
is a series of marketplaces.
is a series of marketplaces.
1
2071
3190
00:17
You can have a marketplace for lemonade,
2
5285
1914
00:19
a marketplace for lemons,
3
7223
1285
00:20
a marketplace for trucks
that transport lemons,
that transport lemons,
4
8532
2379
00:22
a marketplace that fuels those trucks,
5
10935
2555
00:25
marketplaces that sell wood
to build lemonade stands.
to build lemonade stands.
6
13514
3388
00:28
However, capitalism of course, as we know,
7
16926
2445
00:31
is this either celebrated term
8
19395
2436
00:33
or condemned term.
9
21855
1151
00:35
It's either revered or it's reviled.
10
23030
2240
00:37
And I'm here to argue
that this is because capitalism,
that this is because capitalism,
11
25649
3355
00:41
in the modern iteration,
is largely misunderstood.
is largely misunderstood.
12
29028
3201
00:44
In my view,
13
32982
1159
00:46
capitalism should not
be thought of as an ideology,
be thought of as an ideology,
14
34165
2809
00:48
but instead should be thought of
as an operating system.
as an operating system.
15
36998
3278
00:52
Think of your iPhone.
16
40849
1268
00:54
Your iPhone merges hardware with software.
17
42762
3897
00:58
Apps and hardware.
18
46683
1364
01:00
Now think about all the hardware
as the physical reality all around you,
as the physical reality all around you,
19
48071
3737
01:03
and think of the apps
as entrepreneurial activity,
as entrepreneurial activity,
20
51832
2768
01:06
creative energy.
21
54624
1150
01:08
And in-between,
you have an operating system.
you have an operating system.
22
56188
2675
01:11
As you have advances in hardware,
23
59307
2230
01:13
you have advances in software.
24
61561
1976
01:15
And the operating system needs to keep up.
25
63561
2008
01:17
It needs to be patched,
it needs to be updated,
it needs to be updated,
26
65593
2936
01:20
new releases have to happen.
27
68553
1905
01:22
And all of these things
have to happen symbiotically.
have to happen symbiotically.
28
70482
2959
01:25
The operating system needs
to keep getting more and more advanced
to keep getting more and more advanced
29
73465
3302
01:28
to keep up with innovation.
30
76791
1800
01:31
And this is why, fundamentally,
31
79728
2381
01:34
when you think about it
as an operating system,
as an operating system,
32
82133
2206
01:36
it devolves the language of ideology
33
84363
2149
01:38
away from what traditional
defenders of capitalism think.
defenders of capitalism think.
34
86536
3676
01:42
But even if you go to the constitution,
35
90236
1867
01:44
you'll notice, before the founders
even got to the First Amendment --
even got to the First Amendment --
36
92127
3247
01:47
with free speech,
free religion, free press,
free religion, free press,
37
95398
3275
01:50
they thought about patents and copyright.
38
98697
2374
01:53
They talked about the government's role
in promoting arts and sciences.
in promoting arts and sciences.
39
101095
4172
01:57
It's the reason why I could not start
a search engine tomorrow called Goggle.
a search engine tomorrow called Goggle.
40
105645
4413
02:02
(Laughter)
41
110082
1358
02:03
Google doesn't own Gs,
42
111464
1676
02:05
but I couldn't do it
because there could be some confusion.
because there could be some confusion.
43
113164
2779
02:07
So even property rights
have ambiguity built into them.
have ambiguity built into them.
44
115967
2615
02:11
And on and on.
45
119173
1309
02:12
And by 1900, you have other types
of property that come into being.
of property that come into being.
46
120506
4356
02:16
For instance, imagine that in 1900,
you owned 100 acres of land
you owned 100 acres of land
47
124886
3857
02:20
someplace in the Midwest.
48
128767
1419
02:22
It's very easy to see
where your fence ends,
where your fence ends,
49
130709
2095
02:24
your neighbor's property begins.
50
132828
1634
02:26
Now let me ask you,
51
134486
1163
02:27
where in the sky does your property end?
52
135673
2374
02:30
Does it end at 1,000 feet,
53
138071
1681
02:31
5,000 feet, 10,000 feet?
54
139776
2341
02:34
It makes no difference,
55
142141
1183
02:35
because other than the novelty
of a few hot-air balloons,
of a few hot-air balloons,
56
143348
3015
02:38
man couldn't fly.
57
146387
1150
02:40
But within three years, he could.
58
148053
1745
02:41
Now all of a sudden,
it was very much relevant
it was very much relevant
59
149822
2930
02:44
whether your land ends
at 1,000 feet in the sky,
at 1,000 feet in the sky,
60
152776
2674
02:47
5,000 feet, 10,000 feet.
61
155474
1769
02:49
And you have to have
someone arbitrate that.
someone arbitrate that.
62
157665
2618
02:53
And indeed, that's exactly what happened.
63
161116
1961
02:55
And five or ten years from now,
64
163101
1513
02:56
when Amazon wants to deliver a package
over your house to your neighbor
over your house to your neighbor
65
164638
3588
03:00
from that UPS truck,
66
168250
1644
03:01
we're going to have to decide:
Does you property end at five feet,
Does you property end at five feet,
67
169918
3262
03:05
10 feet, 50 feet, 100 feet?
68
173204
2708
03:07
Where does it end?
69
175936
1175
03:09
And there is no ideology
70
177135
1723
03:10
that will tell you
where your property ends.
where your property ends.
71
178882
2565
03:14
It's an operating system.
72
182132
1500
03:16
And similarly,
73
184030
1150
03:17
we're going to see this with automobiles.
74
185205
2078
03:19
A few years after the Wright brothers
figured out flight,
figured out flight,
75
187386
2722
03:22
human beings started using
more and more cars.
more and more cars.
76
190132
2172
03:24
And all of a sudden,
77
192328
1151
03:25
the regulatory system --
the operating system --
the operating system --
78
193503
2286
03:27
had to be patched to all of a sudden
address the safety of consumers.
address the safety of consumers.
79
195813
4574
03:32
That the consumers of vehicles
were presenting danger to horses,
were presenting danger to horses,
80
200411
3127
03:35
other pedestrians, trolleys,
what have you.
what have you.
81
203562
2933
03:38
And all of a sudden,
82
206957
1151
03:40
the drivers of these automobiles
had to have driver's licenses, eye exams,
had to have driver's licenses, eye exams,
83
208132
3834
03:43
registered motor vehicles, speed limits,
84
211990
2706
03:46
rules of the road,
85
214720
1214
03:47
so that horses, pedestrians,
could coexist with cars.
could coexist with cars.
86
215958
4992
03:52
It had to be backwards compatible.
87
220974
2201
03:55
So a new invention had to basically fit
advances from the past.
advances from the past.
88
223199
4498
04:00
Similarly, five or ten years from now,
89
228355
1825
04:02
we're going to see the same thing
with self-driving cars --
with self-driving cars --
90
230204
2791
04:05
coexisting with human-driven cars.
91
233019
2130
04:07
The reason why this is important,
is in 10 years,
is in 10 years,
92
235173
2324
04:09
another thing is going to happen
beyond drones and self-driving cars,
beyond drones and self-driving cars,
93
237521
3449
04:12
but you're going to see
the most valuable economy in the world --
the most valuable economy in the world --
94
240994
3167
04:16
the largest economy in the world --
95
244185
1698
04:17
is going to be a country
run by communists.
run by communists.
96
245907
2268
04:20
The Chinese seem to be
very good at capitalism.
very good at capitalism.
97
248558
2875
04:24
And this is going to have
fundamental problems
fundamental problems
98
252469
3477
04:27
and present an identity crisis
for the United States.
for the United States.
99
255970
3578
04:31
Because for a long time,
100
259572
1665
04:33
free markets coincided with liberties
such as free speech, free press,
such as free speech, free press,
101
261261
5857
04:39
free religion.
102
267204
1302
04:40
And all of a sudden,
this equation is going to be decoupled.
this equation is going to be decoupled.
103
268530
3467
04:44
And when it gets decoupled,
104
272644
1360
04:46
we might find that democracy,
the multitude of voices,
the multitude of voices,
105
274028
3668
04:49
actually impedes capitalism
106
277720
2436
04:52
because a state that does not have
any pretense of limited government
any pretense of limited government
107
280180
4006
04:56
can very quickly mandate
a regulatory framework for drones,
a regulatory framework for drones,
108
284210
3542
04:59
for electric cars, for self-driving cars,
109
287776
2443
05:02
for any new innovation
110
290243
1795
05:04
where they feel that they can leapfrog
Western societies.
Western societies.
111
292062
3727
05:08
And this is a very unique thing
in the American experience.
in the American experience.
112
296792
3880
05:13
And this is why it's very important
to think of American capitalism
to think of American capitalism
113
301236
3897
05:17
as an operating system
and not as an ideology.
and not as an ideology.
114
305157
3150
05:20
Because when you think about it
as an ideology,
as an ideology,
115
308331
2198
05:22
you can have good politics
make for very, very bad policy.
make for very, very bad policy.
116
310553
5113
05:28
That market outcomes and democratic voices
117
316371
3428
05:31
and battles for votes
118
319823
1651
05:33
can end up stifling progress.
119
321498
2444
05:37
So over the next few years,
120
325006
1976
05:39
as this political cycle plays out,
121
327006
2785
05:41
you're going to see American democracy
122
329815
3636
05:45
rise to meet the challenges
that capitalism poses and modernity poses.
that capitalism poses and modernity poses.
123
333475
5498
05:50
And I ask policymakers to think about --
124
338997
3397
05:55
decoupling ideology from economics,
125
343573
3506
05:59
and think about how good policy
can ultimately become good politics.
can ultimately become good politics.
126
347103
4337
06:03
Thank you.
127
351793
1183
06:05
(Applause)
128
353000
4407
ABOUT THE SPEAKER
Bhu Srinivasan - WriterBhu Srinivasan writes about economics, history and statecraft.
Why you should listen
Bhu Srinivasan's first book, AMERICANA: A 400-Year History of American Capitalism, explores the intersections of democracy and capitalism. The Economist selected it as one of its Best Books of 2017. A venture-backed entrepreneur from his early 20s, Srinivasan has built media properties in publishing, gaming, financial content, and technology ranging from video games to municipal bonds. He is currently working on adapting his book to television, identifying the next big things, and outlining his next book.
Bhu Srinivasan | Speaker | TED.com