Wednesday, October 01, 2008

Is this the beginning of the end of capitalism?

The rate at which banks are disappearing and the scale of losses reported by every financial behemoth perhaps flags the beginning of the end of capitalism. The free market system is collapsing and the story of capitalism seems to be following the script followed by the collapse of the communist regimes. A house of cards falls at the first storm, but a fort falls apart more painfully, piece by piece, till a portion collapses, and then the process goes on for decades. There is a sense of loss for all of us who have planned our lives around the possibilities in a capitalist world. In the present world, uncertainty is feeding rumors and paucity of credit is driving banks and governments to the brink of desperation.

Twenty years back United Soviet Socialist Republic started to crumble, ending the largest communist nation that had existed for nearly seven decades. The collapse of the Soviet Union marked the end of Cold War that had divided the world into at least two blocs. The years that preceded the final melt down of the nation that symbolized communism included a war in Afghanistan and change in policy in USSR by Gorbachev's policies that allowed Soviet countrymen freedom of expression. Incidentally US is involved in a war on Afghanistan, perhaps fighting the people trained covertly at its own expense once, to take down an enemy as mighty as itself. While USSR economy epitomized how communist system can be made to work, and then be abused, USA so far had been the prime example of how market forces work and in our times, flounder. While the communist USSR began to fail as it started giving more freedom to people, the capitalist USA is said to have increased vigilance over its citizens in past years.

The two systems - communist and capitalist - were both born after the collapse of regimental rule of emperors and kings. Both developed in response to the desire for something different and better than the system that existed before. The communists wanted to reduce everyone and everything to the lowest common denominator. The capitalists wanted to allow everyone and everything to grow as per demand and supply determined it. Communists thought rigid control of property and industries by the government is the key, capitalists rooted for private property and private ownership. Communists chose for people, limited their choices (ask any East European about the state sanctioned amounts of groceries). Capitalists encouraged people to pick from a number of goods. Communists created demand by limiting the supply, capitalists by exhibiting it. While communists provided for (lower quality) universal health care, education and employment, capitalists created a system where quality of health, education and employment was determined by how much people were willing to pay or strive for. Both systems worked in their own way: generated a world where competition send the Man to the moon, Olympics saw winners from both worlds, scientists and inventors lurked and emerged from both societies, and art of every form blossomed in different styles in both places. Incidentally, capitalists looked down upon communists and vice versa.

Alas! The humanity adds its own perversity to any principle, any ideal, any system. Even the best made plans are laid waste by the irrationality of the human thoughts and actions, and thus what works in theory (free market as well as communist state) runs into turmoil in reality. The virtue and vice are exist within everything in this world. (Rephrased from Tulsidas: jad chetan gun doshmaya, vishwa kin kartar). While communists equated capitalists with greedy pigs, the Animal farm of communists was said to exist on the principle that some men are more equal than the others.

The question about capitalism, and its longevity as an ideal that we must work towards, has become most crucial in our day and our time. What has capitalism failed to give us? Perhaps health and education, perhaps clean air and robust public transportation, perhaps economic equality. What did communist fail to give us? Quality education, freedom of speech and choice, democracy. Incidentally, as US has been the greatest symbol of democratic form of the government, it will be interesting to see of the institution of democracy outlasts its champion. India, which is the largest democracy, has seen this institution become a refuge for hardened criminals, and the politics of vote is driving corruption, communalism and casteism to the level beyond which catastrophe is the only possibility.

Where do we go from here? What will be the dominant financial system in the world in twentyfirst century? Will the axis of power shift again to Europe, or to Asia? Will America survive the crisis, and come out stronger? Will the economic crisis worsen when energy crisis kicks in? As economic meltdown continues, will the immigration laws in US, import duties in many countries change for worse? Will this crisis provide the launching pad for a new religion?

Is this the beginning of the end of capitalism?

1 comment:

Vani said...

well...u need not worry about these "real world" issues...:)