Has Capitalism improved the world? Or is Capitalism an ideology that has destroyed the world?
Hello, friends!
Welcome to the third episode of the Basics series. Come let's understand the successful ideas of Capitalism and its failures.
Content Table
- Positives of Capitalism
- Monopolies
- Rising Inequality
- The Poverty Circle
- Impact on Environment
- Brainwashing Ads
- Capitalism and Democracy
Positives of Capitalism
The largest successful idea of Capitalism might be Decentralization. In capitalist countries, everyone has the freedom to start their own business. Even you can start a business. And every year lots of new businesses and start-ups. These businesses work independently from each other. It means that they are Decentralized. In fact, they compete with each other which leads to innovation. On the other hand, in communist-socialist countries like the Soviet Union, everything is controlled by the government.
All major production areas and industries are controlled by the government. There is only one point of control. Centralization. For the top few people to control all the production means of the country and to balance the economy is very difficult. This is believed to be one of the major reasons for America's win against the Soviet Union during the cold war. Because of the central planning of the Soviet Union, their growth was far less when compared to America's. When these numerous decentralized businesses in capitalism work independently, they will also compete with each other to better themselves.
They get a financial incentive here: the profit. To earn this profit, the businesses would want to work better. better than their competitors, which will lead to innovation. So, Capitalism provides a financial incentive that triggers Innovation. Because of this innovation, in the last 100-200 years, Capitalism we have seen a level of technological development that we had not seen in the two thousand years of human history.
Think about it. Cars, Airplanes, the Internet, Computers, and Cameras, all were invented in the last 100-200 years. People favoring Capitalism also argue that because of it, in the last 50 years, poverty has fallen globally. The education level of people has risen. And the overall living standard of people has improved a lot.
Another positive point of capitalism has been that it lets everyone dream. That you too can reach the top if you want. Everyone has a chance to reach the top. If you work hard, you too can become like Bill Gates or Elon Musk.
Whereas, in a Socialist and Communist system, it is not possible for you to become that rich. Additionally, a consumer, in a capitalist system, has more options in every aspect of life.
Take India's example. There was a time when there was only one channel on television: Door Darshan. Which was run by the government. But when the television sector was opened up for privatization, and there was a free market, you have numerous options today. There are so many channels on Tv. Your choices have increased manifold. Your entertainment value has increased. It has similarly affected several other sectors. Many people will list out these benefits of Capitalism that I told you about and will promote this ideology without a second thought. They'll promote privatization. But it is important to understand that there are several adverse effects as well. In fact, some of them are so harmful that they may destroy the world.
Monopolies
Today, the companies termed monopolies have become so by acquiring other companies. In social media, Facebook is considered a monopoly because Instagram and WhatsApp, the two most used social media apps, are owned by Facebook. Google is also said to be a monopoly in the world of the internet because YouTube, through which you are watching this, is owned by Google. Android is owned by google. Google Maps, Google shopping, Google pay, and Google loans, in fact, the parent company of google Alphabet has acquired 241 companies.
Rising inequality
What I mean to say is that this whole system creates inequality where the rich people and the rich people and the rich companies have all the wealth, and the small businesses cannot compete with them in reality. In theory, there is competition in capitalism but in reality, how can small businesses compete with these monopolistic giant companies? In the last 30-40 years, since the neoliberalism ideology has risen rapidly across the world. It was reported in 2017 that the top 1% of people, control over the 82% of the new world generated in the world now.
The richest 42 people in the world hold as much wealth as half the population of the world. That 3.5 billion people collectively own. It is not possible that these 3.5 billion people are extremely lazy and only these 42 people have worked hard to get this rich. There is no direct co-relation with hard work, like I explained in the blog, the capitalist system works like this. THose who have wealth can create more very easily.
The "Money Begets Money" concept. And the other thing that I told you now, "Acquire or Get Acquired."
Either eat small fishes and grow or some bigger fish will gobble you up. Thirdly, there's another saying similar to "Money Begets Money." "Poverty Begets Poverty."
The Poverty Circle
The poor people do not have the capital to invest. If they don't have the money to start with, it will be extremely difficult for them to rise. They would not be able to spend on their education or health and eventually, they won't be able to generate wealth. To counter this, the governments of many countries provide free education. I'll talk about it later in the socialism blog.
Impact on Environment
The next failure and probably the greatest failure of Capitalism has been Environment destruction and societal destruction on one hand, I said that the poverty rates have drastically fallen the last 100 years, literacy and education rates have risen rapidly, In the same 100 years, the environmental destruction that we've seen hasn't been seen in 2000 years, or even the entire human history.
The speed of deforestation, extinction of biodiversity and increasing climate change, is unprecedent And this happened because in capitalism, companies focus only and on their profits. They are not concerned about the global effects of deforestation. As long as they keep getting their profits and keep getting richer. This craving for profit is not only destroying our planet, but it aslo negatively affects our society tremendously. It's true that consumers have choices. THey're free to chose what they want to buy from which company. But in reality, companies bombard us with ads. These changes the mindset of the entire society.
Brain washing ads
In the ads, it's shown that the chemically altered, processed, fatty burger is very good for you. YOu'll be happier when you eat it. And when you'll see numerous burger stores around you selling these burgers when your friends and family members would want to eat here, you too would wnat to eat there.
You'll want to eat this burger, which will eventually lead to obesity. In America, 34% of adults suffer from obesity. In the list of countries where the cancer rates are very high, America is at number 5. America is a capitalist country where a free market has been given to fast food like the brands of sugary drinks, they can sell whatever they want, ads showing whatever they wants. All for the sake of earning profits.
In fact, to earn profits, companies have misted consumers into buying things which were harmful to them. Things people didn't need but their demand was created by the advertisements. Major examples of this are the tobacco and alcohol companies. They run ads that make people feel having their product will make them proud they'll get the respect of society. But every example is not this extreme. it gave rise to consumerism as well. Think about 50 years ago.
What did a common man need? What did the society consider necessary for a common man to have to lead an easy life? A house, a secure job and good food. Now days, how many more things do you need a house, a car, a mobile phone, at least 10 new clothes, shoes, and every year or two you need to get new clothes. Only then will you be considered at a respectable level in society. But think about it, 50 year ago, how many clothes and pairs of shoes did your grandparents and great - grandparents own? This capitalist system forces people to buy this and that and everything.
The more you buy the better. The more new things that you have is good for you. The lastest Iphone and the lastest car model, the more you buy and the more you consume is better. WHY? Because the companies will get more and more profits. This system works on the model of infinite consumption. As many people buying as many things that they can. But in reality, the resources are finite. And this reason why we are seeing a large scale environmental destruction because of capitalism. This system attacks your insecurities is to sell products. If your skin is dark, buy a fairness cream. If you're a bit hairy, buy this laser treatment. If your lips, nose, face is not the same as such, and such top celebrity, buy these new surgeries.
Capitalism and Democracy
YOu're short, buy this new drink to getter taller. And finally, I'd like to talk about failure of capitalism to protect democracy worldwide. WHen compared with communism, capitalism has historically been better suited for democratic structure. There have been dictatorships in communist countries frequently. But capitalism worked well with democracy and thrived. I am not saying that there weren't dictators in capitalism.
There were as I talked about in the last blog. But in general, capitalism has a better record. But the failure of this system, this ideology is seen when companies get so huge and have so much wealth that they become more powerful than the government. In such cases, the companies can easily bribe the governments, buy out the governments and even hep in manipulating the elections.
Companies are concerned with their profits only. If they feel they'll get better benefits if a particular politician wins, they'll fund that politician and support their election campaign. This might happen publicly, like in America, know as I Lobbying. This is legal in America. Which I believe to be extremely wrong. In countries like INdia, it isn't very apparent. Especially since the passsing of the electoral bonds. Which company is funding which political party? We have no idea.
But overall, all the companies will help that political party to win that will give them the most benefits. This corruption can work in all aspects and is very harmful to every country. The company might pay money to the government coercing them into selling forest land to them. To put the forest on sale. And the government would comply. Companies may ask for the rules to be changed in such a way that though the citizens may suffer, the companies are benefited.
The governement would comply. The government would basically become puppets in the hands of the companies. This is often an accusation against countries like America. To deal with these failures of Capitalism, countries around the world have come up with different strategies. What are the strategies? I'll take about them in the next blog where I will explain Socialism. WHich are the socialist ideologies that have tried to counter the various failure of capitalism.
If you like the blog them share it. Comment below your opinion on these ideologies.