Thinking the Unthinkable: In an Age of Billionaires and AI, Is Capitalism Still Viable?

Inflation proves that money relates to real world resources, so do billionaires mean that capitalism fails the falsifiability test?

This is the first in a major new series exploring our economic system, and how it could realistically be modernised in a global environment.

Today's capitalist economy is significantly different from earlier economic systems, yet has been around for centuries, arguably starting to dominate in the 16^th century. The benefits of capitalism as an economic system have been profound: humanity has rocketed in development, both industrial and societal, since capitalism really took hold upon industrialization. Our societies have largely gone from unsanitized, undeveloped places, to realms of industry and entertainment. Capitalism enthuses business owners and motivates employees. As little as 5 years ago, it would be unthinkable for an intelligent person to really question whether there’s a more suitable option for running our economies.

Thanks to technology and relatively low tax rates, wealthy individuals within our current version of capitalism can continually launch new business ventures. In theory, this is beneficial: we no longer live in primitive conditions, and even those considered poor today in developed countries generally have better living standards than their counterparts from two centuries ago.

Some politicians claim that further reducing taxes for the rich – sinking deeper into capitalism’s most basic values of rewards for entrepreneurs – will increase their enthusiasm to innovate and benefit society even more. But if you think about it carefully, this belief is questionable in modern society, at best. And, what’s more, it leads us to some pretty stark realisations.

Imagine being a billionaire. You own numerous properties, luxury cars, and yachts. Your everyday needs are effortlessly met by hired staff, your opinions are highly valued, and you have direct access to powerful politicians due to your perceived societal value. Despite all this luxury, most of your wealth simply sits unused, accumulating even more wealth through investments. Some of those investments support companies and firms who hire and benefit society and the wider economy.

Initially, wealthy individuals invest their capital in promising ventures. But as their wealth grows from millions to billions, something illuminative happens: their investments shift from funding new innovative ideas, or working on such ideas themselves, to purchasing existing companies. When these companies succeed, it’s often by ‘maximising efficiencies’ (which usually means cutting staff numbers), and the billionaires' wealth multiplies despite the economic harm done by the redundancies. If they fail, these businesses are broken down and sold piece by piece, and far more redundancies take place, and the cycle repeats itself.

The problem with this is clear: continually encouraging these wealthy individuals to generate more wealth isn't particularly beneficial for society. The richer they get, the fewer genuinely new and innovative companies they create. Instead, they focus on buying existing companies to make quick profits, and actually reduce the number of workers (in turn reducing the amount of capital from the company which flows back into society) in favour of increasing the amount of wealth they hoard themselves.

Elon Musk illustrates this phenomenon perfectly. Consider his purchases of Tesla and Twitter. Rather than founding new revolutionary ventures, Musk bought existing companies and grew his wealth. Tesla's value surged significantly, which was purchased whilst he was still relatively unknown, before now facing an uncertain future as his wealth and motives have changed. While Twitter, bought whilst the company was already a multi-billion dollar entity, faced major staff reductions immediately. These cuts not only affected thousands of employees but also impacted broader economic stability, reducing consumer spending and increasing unemployment. Musk as an up and coming businessman can contribute and create businesses that grow the economy: once he starts buying businesses, the aim tends to be more on reducing employment costs, reducing staff numbers, and thus harming the economy.

Why do we consider these to be economic facts – why is what Musk does economically harmful, despite being the essential goal of capitalism? Well, consider the different impacts of money in an economy, depending on who holds it. Give one dollar to a million ordinary people who are about to buy groceries, and that money is immediately spent—directly supporting the economy by purchasing everyday goods. 40 cents might go to the retailer, which supports wages and growth, 40 cents to the company and workers who made it, and another 20 cents to the distributor, who employs the drivers and operatives. Direct economic benefits. Give the same million dollars to one person who already has billions, and it likely ends up sitting idle in a bank account or used as part of a deal to buy another large company, effectively removing it from active circulation, or transferring it later to another wealthy business owner.

This examination of who holds money shows us something important: while the economy seems complicated, the underlying principle is straightforward. Each unit of currency represents actual resources: land, food, building materials, etc. History provides clear evidence of this. Governments sometimes try to resolve financial issues by printing more money, mistakenly believing this creates wealth from nothing. In reality, this simply reduces the currency's value – which is defined as inflation. Each additional printed dollar buys fewer resources, as there are only so many resources in the first place, proving that money must always represent real-world resources.

This fact – that money relates to real world goods – circles back to demonstrate the critical issue: when vast amounts of wealth is concentrated among a small elite, fewer resources remain available to the rest of society.

Capitalism has undoubtedly driven progress, leading to incredible technological advancements, curing fatal diseases, and even exploring space. The system is designed to reward hard work with wealth, perhaps in the millions, occasionally even tens of millions. However, it was never intended to create billionaires or multi-billionaires. Certainly not thousands of them. Such extreme concentrations of wealth suggest something fundamentally wrong with our economic system, where real world resources are then hoarded away from people. Capitalism made sense when replacing systems of bartering, but it no longer makes sense if people are able to exploit it to hoard wealth, or use it’s values to boost stock value against the interests of society and the wider economy.

Think back to earlier times before digital banking, paper money, or capitalism itself, when trade was simply exchanging goods directly. Hard work translated directly into more resources: more crops, livestock, or goods. Practical limits naturally prevented extreme resource concentration. Nobody could manage millions of sheep or thousands of workers effectively, when each deal is bartered. Society inherently, naturally, curbed excessive wealth accumulation.

While capitalism improved trade efficiency by introducing currency, it unintentionally removed those natural barriers and our continued international failure to tax wealth effectively means that capitalism has become dramatically impractical. Today's billionaires can effortlessly accumulate wealth far beyond society's original intent, undermining the very fairness capitalism aimed to promote. There’s only so long this kind of system can carry on unchecked, particularly in a world where AI promises to gradually alleviate businesses of human labour, too.

The Falsifiability Test

Few ideas have shaped modern society more powerfully than philosopher Karl Popper’s principle of falsifiability. Popper didn’t just set a rule for modern scientific thinking, he gave us a razor-sharp tool to separate serious theories from pseudoscience. Viable ideas from fanciful ones. His insight was simple but revolutionary: if a theory cannot be proven wrong under any thought experiment, it has no place in the realm of the sensible. Real theories must take risks. They must say, “Here is what would prove me false”, otherwise we’re dealing with ideas that lack a sensible rigor.

This idea transformed everything from physics to psychology. But what if we turned Popper’s tool on capitalism? What would it take to falsify the theory that capitalism is a viable economic system?

Here’s one unarguable criterion: if capitalism leads to such extreme concentrations of wealth that the majority are materially worse off, while vital resources are hoarded instead of circulating, then the system would no longer be fulfilling its core promise of widespread prosperity through free enterprise and innovation.

By that measure, we are already well past the breaking point.

Today, a handful of billionaires command more wealth than most countries. Wages for ordinary workers have stagnated. Basic needs—housing, healthcare, education—are slipping out of reach. Automation replaces jobs faster than new ones are created. Entire economies now bend to the will of a few, while the many are left scrambling.

This is not a minor flaw. By Popper’s standard, it means the theory no longer holds. It means that society has developed to a place where current capitalism is no longer viable. A system that once unlocked historic human progress may have outlived it’s practical use.

Popper gave us the courage to challenge dogma—even when that dogma is wrapped in tradition or success stories from the past. Capitalism should be no exception.

The burden of proof has shifted. It is no longer enough to assume this system must continue by default. The question now is: what comes next?