“As capitalism approaches its bicentennial, it is beset by crisis. Increasingly, its supporters as well as its critics ask: Can capitalism survive?
“The question is all the more urgent because the U.S., by far the most powerful capitalist economy, is recovering from its recent debilitating bout of inflationary recession and faces a particularly uncertain economic future.
“…Within many a capitalist country, the free market is being steadily hemmed in by the power of omnipresent government regulators, mass unions and giant corporations. Meanwhile, many intellectuals—and young people—contend that capitalism at best can build only a rich, not a just society. In January seven Nobel prizewinners, including Economists Gunnar Myrdal and Kenneth J. Arrow, signed a declaration condemning Western capitalism for bringing on a crisis by producing ‘primarily for corporate profit.’ They called for an intensive search for ‘alternatives to the prevailing Western economic systems.
“…It is a little early to write off capitalism. The system has survived wars, depressions, the loss of colonial empires—even the accession to government power, in such countries as Britain, France and Germany, of parties that called themselves socialist but proved unable or unwilling to dismantle the system.” —Time, 7.14.75
Capitalism is far from perfect, but I know of no other economic system that can claim the title of perfection either. So we’re left to fix capitalism, to make it work better. Umair Haque calls it Capitalism 2.0. Maybe you have a different name for it, but ultimately, the goal is to be engaged in something of value.
So much of the recent economic crisis came from putting our faith in what amounted to a series of magic tricks—dazzling, yes, but lacking substance. It’s time to put the rabbit back in the hat. The goal isn’t to make things like they were before, but to learn from our mistakes so it doesn’t happen again and figure out a better way forward.
{ 2 comments }
Very true Carl. We hear all the time (especially in times of crisis) that capitalism is to blame for the worlds ills, blah blah. But the other systems we've yet tried have utterly failed to improve the quality of life for the people of the world in comparison to capitalism. Even left leaning governments in the developed world know that the good outweighs the bad and that nationalising or collectivising production/wealth is the road to ruin.
The problem is that the advantages of the market economy are hard for most people to intuitively grasp. It seems cold and harsh and inhumane at times. Something just seems wrong about market mechanisms. But they produce optimal outcomes far, far more often than government intervention. What other system rewards productive and smart people and conversely punishes incompetence better than the market?
The financial machinations of the banking community was unproductive, so I would welcome a return to the market rewarding people who do things and make things. The fact that many people are leaving Wall Street for other industries is probably a net good for the economy.
Very true Carl. We hear all the time (especially in times of crisis) that capitalism is to blame for the worlds ills, blah blah. But the other systems we've yet tried have utterly failed to improve the quality of life for the people of the world in comparison to capitalism. Even left leaning governments in the developed world know that the good outweighs the bad and that nationalising or collectivising production/wealth is the road to ruin.
The problem is that the advantages of the market economy are hard for most people to intuitively grasp. It seems cold and harsh and inhumane at times. Something just seems wrong about market mechanisms. But they produce optimal outcomes far, far more often than government intervention. What other system rewards productive and smart people and conversely punishes incompetence better than the market?
The financial machinations of the banking community was unproductive, so I would welcome a return to the market rewarding people who do things and make things. The fact that many people are leaving Wall Street for other industries is probably a net good for the economy.
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