The Disadvantages of Capitalism

Capitalism as an economic system has always been a hard one to oppose – at least up until now. It has always been considered as the only economic system that works in practice. Many of capitalism’s biggest cheerleaders laughed at the disastrous efforts of the Russians, and others, as their attempts to formulate a communist society failed so miserably. Capitalism as a system has reigned supreme, like a dictator that is still able to hoodwink those around him that he is a public benefactor, concerned only with his people’s welfare.   

But now in 2012 it is becoming undeniable that the world is getting into a perilous state. The world is still suffering the mother of all hangovers from the financial crisis of 2008, with the poorest people picking up the tab for the excesses of a rich elite, who are still stashing away obscene amounts of money in tax havens. Meanwhile the Eurozone faces collapse and threatens to take many other countries down with it.  Individual countries try desperately to revive their economies but despite bailouts, cash injections, changes of policy, and government overhauls, no solution appears to be in sight. Ecologically the planet faces multifaceted problems, including melting polar ice caps, dwindling natural resources, a food and water crisis with many facing starvation as a consequence.  All the while governments assure the populace that capitalism, with its unstoppable urges, is the very tonic for our problems.

While those who defend capitalism often point to the failings of socialism and laugh at the naivety of communism,they are never quite so quick to point to the fact that it is capitalism that has brought us to the position that we find ourselves in today.

Capitalism has always lived by the premise that it is the best way to combine economic freedoms with personal prosperity. Yet globally there is 1 Billion people who are starving, 1% of the world’s population control 40% of the world’s wealth and there are now 1.5 Billion living in absolute poverty. The facts are glaringly obvious: the minority are rich, the majority are poor. When politicians talk about the national interests with such broad brush strokes it simply not representative of the facts.

Recent reports from the UN and Oxfam have warned that the world is now facing potentially disastrous levels of food output that threatens to kill millions of people in its wake. You would have thought this prospect would turn even the hardest of hearts to shed some kind of sympathy towards it? Not so Chris Mahoney, a trading manager for the commodities company Glencore. Mahoney had a far different view on the food crisis which he viewed as “Good business” and boasted that Glencore “Would make a killing.”  No doubt Glencore are not the only ones licking their chops at this prospect.  After all the investment bankers lobbied – lobbied being another word for bullied  – governments to allow them to gamble on food indexes. This policy has been disastrous for millions of people, because it has sent the price of staple foods rocketing to the point where people cannot afford to eat any more

Competitive societies are societies that lack equilibrium.  From our early schooling in most Western countries, we are openly encouraged to compete with others in order to get to where we want to be. There is very little thought, if any, to consideration of other people. On the contrary looking after oneself is where it’s at. Yet people complain about the lack of social justice and inequality. But then what kind of society is likely to be created when we set up an educational system that creates winners and losers? – With many more of the latter than the former

Globalisation has given us some pretty harsh lessons in interconnectedness. The sub prime mortgage collapse didn’t just affect Americans, but it sent shock waves all across the globe.  Many people are now looking at the potential collapse of the Euro zone with the same bated breath, as its collapse will have serious ramifications for many other countries outside of it.  The Chinese, who were looking forward to becoming an economic powerhouse, suddenly see their economy slowing down, as their American purchasers find themselves unable to find the money for cheap Chinese exports any more. Overconsumption and global warming threaten our entire planet,  yet when countries come together to try and agree to reduce carbon emissions no deal can be struck, as each country puts its individual interests way before the interests of the world as a whole.  Consequentially things continue to get worse.  

Individualistic thinking in an interconnected world is clearly a problem. In a world where mutual reliance is becoming more obvious, where the earth’s resources won’t last forever, where looking after the planet  is essential the survival of humanity. It stands to reason that creating a cooperative social system that reflects all of that is imperative. Otherwise a similar situation to the Kyoto debacle occurs (i.e. the world faces a critical problem that can affect everyone, but because countries are too selfish to put their individual national interests aside, no agreement is reached and face catastrophe as a consequence).

The world’s problems continue because humanity continues operating in an egocentric way. The crisis that the world is facing therefore is not economic, financial, or ecological. It’s an ideological one caused by the fact that humans act with little consideration towards other human beings. A lot of countries have carried on with a social system that has been based on individualism and now they reap the harvest of this: economic crises, war, unemployment, starvation and others. Unless human relations improve more of the same problems are assured. Only by the creation of a social system that endeavours to place people’s wellbeing at its forefront can there be a reversal of the problems that the world is facing. The key to solving the world’s problems Is dependent on this.