By now it must be familiar: Billionaire hedge fund founder Ray Dalio thinks capitalism is broken, and we urgently need to reform it. But this week the Milken Institute Global Conference made clear that, among his ultrawealthy and powerful peers, he’s in good company.

“Every system needs to be renovated, needs to be improved. Can we agree that we need to do that?” he said in the closing panel of the conference, before adding, “If we don’t agree, we’ll have some form of revolution; that could be to abandon capitalism or to go to another extreme.”

He asked the audience if they agreed with his assessment. Most of the crowded ballroom raised their hands.

Anxiety about capitalism underpinned the entire conference, including its chosen theme of “Driving Shared Prosperity.” It had Crescent Capital’s Mark Attanasio citing inequality, hedge fund founder Sir Michael Hintze riffing on Karl Marx, and multiple billionaires, including Dalio, citing a widely shared fear of actual class war.

The group gathered in Los Angeles this week included some of the most influential, and wealthy, executives and business leaders in the U.S. and the world, and their brainstorming for ways to fix this system was sincere. In part it’s self-interested: They want to prop up the system that has worked so well for them, and don’t want their riches taken away. But on panels and in interviews, they also made it clear that they think it’s a system that can work for most people. Capitalism has lifted people out of poverty and helped foster technological advances, as in medicine, that have saved millions.


Some were unconvinced that the “system” needed any fixing. Citadel’s Ken Griffin said the free market had worked out for him and his employees. Indeed it has: Institutional Investor’s annual “Rich List” ranking, published the same day as his talk, ranks Griffin as the third-highest-paid hedge fund manager, pulling in $870 million last year. And former Virginia Gov. Terry McAuliffe and speaker-at-conferences Niall Ferguson dismissed the rising interest among young people in “socialism” as a lack of education or historical awareness.

More agreed with Dalio. Robert Smith, the founder of private-equity firm Vista Equity Partners the U.S.’s richest black man, said, “It’s time to re-architect what is this fabric” that comprises the American dream, reminding the audience that, at age 56, he is the first in his family “to have full rights in this country,” from voting rights to the ability to live anywhere he wanted.

“The economic opportunity that was afforded me has changed, it has shrunk,” he said. “We had a period of time, a window opened—through the luck of life, I happened to be one of those kids who made it through that window.” But now, at those same schools and communities “are as segregated as they were in the ’50s.”

Even among those who see a problem with capitalism in its current form, there was little agreement or actionable insight on what to do about it. Smith cited work he’s done on creating internships, connecting people to opportunity. Dalio has prescribed public-private partnerships, examining the return on investment of incarceration, and improved education, citing his own recent donation to Connecticut schools.


Dalio also suggested some undetermined group get together and brainstorm. If we could “just calm down and not be angry with each other,” and approach the problem like engineers, bring a skilled bipartisan group together “and almost lock them in a room, or lock ’em in someplace for enough time, and not come out will they agree on what to do,” he said, “we’d be a lot better off.”

Alan Schwartz, the executive chairman of Guggenheim Partners and former chief executive officer of Bear Stearns, also suggested a bipartisan commission that could tackle issues like reducing occupational licensing, which critics contend restricts job mobility. (Advocates say it increases wages and promotes consumer safety.) Ivanka Trump repeatedly highlighted workforce training and certification in a lunch program.

Whatever their preferred solution, Milken attendees can get it into influential ears. Conference-goers could rub shoulders with government officials from Jared Kushner and Ivanka Trump to Secretary of Commerce Wilbur Ross. On Wednesday, Milken unveiled plans for a new “Center for the American Dream,” a museum and headquarters for his Institute, fittingly right across from the Treasury Department in Washington—a physical tribute to Milken’s influence in American politics, and representative of the growing ability for the ultrawealthy to weigh in on policy ideas and regulations.

But for all the consternation and fraught conversation, some cast the issue as simple. As Sir Hintze put it: “if you have no capital, why be a capitalist?”


Write to Mary Childs at mary.childs@barrons.com