Is capitalism reaching its limits?

＊This article was originally written in Japanese by our CEO, Yoshihide Arai in September 2020.

Recently, I have been feeling that capitalism is approaching its limits.
I can’t help but feel this way whenever I see the changes in the market capitalization of companies such as GAFAM, which represents the United States, and BATH, which represents China.

The fact that GAFAM surpassed the total market capitalization of the 2,170 companies listed on the first section of the Tokyo Stock Exchange with only five companies in the Corona disaster was more than a surprise, it gave me the impression that capitalism has reached the point of no return. One of those companies is Atrae, so I feel the difference in power painfully…

Capitalism is naturally a much better system for humanity, and there is no doubt that we have achieved economic development through it. On the other hand, as Piketty’s theory says, the rate of return on assets is outpacing the growth of income, and the gap between those who have wealth and those who don’t is widening.

Even if it is just for the sake of it, when social insurance premiums, income tax, and inhabitant tax become so high, it will become extremely difficult to build assets through employment income, and the economic rationale for earning more unemployment income will increase.

In fact, there are many entrepreneurs like us who have built up huge assets by selling their shares in their companies, not to mention IPOs. There is no doubt that I am one of the beneficiaries of such capitalism, and while it is true that it has allowed me to live a somewhat better life, it does not mean that I can let go of my belief that capitalism is wonderful.

In Japan, the income of doctors who are on the front line every day performing surgeries and treating patients, especially those who are saving lives by using advanced technology in university hospitals, seems to be too low. While we entrepreneurs work several times harder than others and are proud of the value we have created for society, I honestly wonder if we have contributed enough to humanity to earn tens of times as much as those doctors.

The same may be true for some of the bureaucrats, politicians, and educators who are earnestly struggling to make Japan a better place.

In the rationality of capitalism, if you think about the ROI of your life, where you should invest your time and effort to maximize your compensation, you will naturally end up in Silicon Valley more than Wall Street, and if you think that this is GAFAM, you will feel the limits of capitalism.

Of course, I’m not an expert on economics or anything like that, this is just my first-hand experience as an entrepreneur, but I thought I’d write a blog about the feeling I’ve been having lately as I continue to gather information and think about the direction my company should take.

I’d like to learn more about capitalism from someone who knows about it.