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Why Paul Tudor Jones Thinks Capitalism May Need to Be Overhauled

By NexChange
Capital Markets

With a net worth estimated by Forbes to be about $4.7 billion, there’s no argument that capitalism has been very good to Paul Tudor Jones.

But the billionaire hedge fund manager and philanthropist on Tuesday told CNBC‘s “Squawk Box” that he believes the growing income inequality in the United States proves that capitalism probably needs “modernizing.”

Per the interview:

“Capitalism may need modernizing,” the reclusive trader told CNBC’s “Squawk Box” on Tuesday in a rare interview. “In 1985, 35 percent of nation’s wealth was owned by the bottom 90 percent. Today, they own 23 percent, and that 12 percent has gone to the top.”

Jones pointed to economist Milton Friedman’s nearly 50-year-old definition that the “social responsibility of a company is to improve its profits.”

“When Milton Friedman said that, tax rates had just come from 91 percent to 70 and income inequality was one-fifth of what it is today,” he said. “You can see how it was relevant at the time but fast forward to where we are today. It’s a different deal.”

Meanwhile, Jones also predicted that the stock market will rally near the end of the year – and told CNBC that “we’ll see rates move significantly higher beginning some time late third quarter, early fourth quarter.”

Photo: Bret Hartman/TED

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