CRISIS OF CAPITALISM

The two most talked about issues that are hogging the headlines nowadays aside from the upcoming American election are the Global Financial Crisis and the Melamine Milk Scare, two different and independent issues but in reality, the two are connected. Both issues are actually symptoms of a greater malaise that is affecting our lives today and that malaise is the crisis of capitalism. For starters, this isn’t the first time that capitalism is mired in crisis. Over the course of centuries, capitalism has spawned many crises and perils of its own doing but somehow, capitalism as a socio – economic system had not only survived the many crises. It even manages to come out stronger and even weathered the challenges of other socio – economic systems to the point that it outlasts other systems that threatened to replace it as the dominant way of life. From the exploitation of labor that led to the rise of communism and the resultant cold war to the exploitation of the resources of third world countries leading to the 19th century colonialism and the World Wars to the exploitation of the environment that threatens human survival for the next hundred years, capitalism has more than once pushed human civilization to the brink of extinction. From the first stock market crash during the Holland Tulip Mania in 1637 to the Global Depression of the 1930s to the Asian Financial Crisis of 1997 to latest Global Financial Crisis of 2008, capitalism has authored one too many of a banking and financial crisis that destroyed the wealth of many and dashed their dream of prosperity. From the Foot and Mouth Disease to the Mad Cow Disease to the Salmonella Scare to the latest Melamine Milk Scare, capitalism had more than once toyed our health and played a cruel and sadistic joke with our lives. All of these are committed under the system that is known as capitalism and the reason for it lies in the very nature of capitalism – that of a system based on the individual’s boundless pursuit of profit to the extent of insatiability – greed. Too often than not, human beings under the capitalist system has systematically undervalued the “cost” (not simply the financial cost as in the cost of production) versus the profit to be derived. Most of the time, humans turned a blind eye to the “cost” or more bluntly, blinded by the dazzling profit to even care for the “cost”. Although, it could be argued that capitalism doesn’t have a monopoly on greed and that other socio – economic system is as guilty as capitalism but the fact is, greed has found its greatest expression under capitalism in a scale unrivaled by any other system. However, capitalism is not without its merit. Because of the emphasis on individual’s right to pursue profit based on their own volition rather than based on some whimsical authority figure, capitalism has manage to bring forth prosperity to a large number of people worldwide, creating a entire new social class – the middle class out of the vast number of poor. It has succeeded what no other socio – economic system could have done in “spreading the wealth” to the greatest number of people. So in the final analysis of what is good and what is bad about capitalism, the conclusion drawn would find capitalism superior compared to the other system that have been known so far but somewhat lacking and that a better alternative would be a welcome change. Unfortunately, such alternative are nowhere to be find. There is no emergent system, no “better version” of an old system that could sufficiently replace capitalism. Therefore, for the time being, it seems that capitalism would again survive. Even so, capitalism would have to undergo changes much like the changes it was forced to accept with the onslaught of communism and socialism – that of regulation– reining in its greed and which at the same time, constraining its dynamism as well. There are actually two fundamentally different approaches to regulation. The first one involves government regulation with it’s over burdening, time consuming, and slow moving bureaucracy. The other involves voluntary self – regulation, i.e., business ethics, corporate social responsibility, corporate citizenship, which might not be effective considering that not everybody would subscribe to it. At any rate, whatever form would it takes, there is no escaping the fact that the future of capitalism is in more regulation but not too much hopefully.