Sunday, February 15, 2009

The capitalist alternative

THE defeat of the communist East by the capitalist West in the battle between systems by the end of the 20th century has blown the theories of Karl Marx in both Das Kapital and The Communist Manifesto into smithereens.

The critiques of Marx on capitalism was heckled while most of his utopian predictions about revolution and the triumph of socialism were shamefully wrong—in fact, many of his political thought fanatically carried through the century brought misery to millions in countries ranging from China to Russia.

But that was way back when credit-default swaps and subprime mortgages and global economic imbalances were beyond imagination. Today, the critiques of Marx on capitalism may have been prophecies. “Were Marx critiques on capitalism right after all?” asks the Archbishop of Munich, Reinard Marx, in his latest book entitled Das Kapital, borrowing the famous book title of his namesake. He adds: “Could it be that capitalism is just an episode of history that will end at some point because the system will collapse as a result of internal contradictions?”

Capitalism is in shambles. The panic to avoid financial collapse and economic depression is now the overarching itch of government leaders, central bankers and regulators all over the globe. “If governments are not in a position to show that we can create a social order for the world in which such crises do not take place,” warns German Chancellor Angela Merkel, “then we’ll face stronger questions as to whether this is really the right economic system.”

“The creative destruction of capitalism means that, much like a flock of vultures, some industries and enterprises will always find nourishment in the misfortunes of others,” says economic writer Michael Elliott. He cites the ballooning poverty as one big paradox of capitalism. He says: “Conventional wisdom has long insisted that if nations got the economic fundamentals right—allowed the market to set prices, were fiscally responsible, established systems of property rights and dispute resolutions—the gains would trickle down to the poor.” Horribly, that is not the case.

On January 28 to February 1, politicians, industrialists, financiers, academics and NGOs gathered in Davos, Switzerland for the annual meeting of the World Economic Forum (WEF); they went and gone looking for answers. But former British Minister Tony Blair gives the best assessment: “Ask experts what to do and the most honest reply is ‘I don’t know.’”

Still, a mea culpa is better. Such as Obama’s admission that the weakened state of U.S. economy or say, capitalism, was “a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices.”

No comments: