By Francis Aubee
Nowadays, “capitalism” has become a buzzword synonymous with billionaires, exploitation, greed, government inefficiency, environmental degradation, etc. For these and several other reasons, many people have repeatedly called for the “overthrow”, “boycott” and/or “replacement” of what is believed to be a very brutal economic system. Who is to say that they cannot voice their displeasure with a system that they perceive to be the source of many wrongs — economic, political, etc.? However, in critiquing, justifiably or otherwise, very few have actually done their due diligence to proffer a better, more viable, and comprehensive economic alternative based on empirical evidence. That is to say, only a handful have even attempted to come up with capitalism’s replacement, or better yet, an improved economic system that addresses the shortcomings of capitalism and makes everyone happier, healthier, and wealthier.
Is capitalism a flawed system? You bet it is. Should it be reformed? Most definitely, good reforms keep systems going. Does it produce winners and losers? You bet it does. Capitalism — the private ownership, exchange, and control of means of production with little to no government interference — is simply not perfect, and certainly not moral, and I don’t expect it to be. Today, it remains the predominant economic system and model globally — albeit with variations. Free markets and the invisible hand has led to previously unfathomable innovations, increased trade, and technological advancement. We have also witnessed great prosperity and increased inequality.
From what I have seen and perceived (though I may be wrong), many people are not necessarily against capitalism, in fact, they are beneficiaries and contributors to the system directly or indirectly. The irony and self-contradictions are often rooted in the realization that, while many billionaires may be derided — and perhaps rightly so — especially in the face of climate change, poverty, and rising inequality, many of these critics and secret admirers would not hesitate to happily replace them if they could. Alas, upon attaining a certain economic class and financial comfort, many folks will likely change their tone and perception of the system — echoing sentiments of hard work and the transformational power of free markets. This type of reasoning I find troubling.
In the ongoing cryptocurrency frenzy, one can easily see that so many people — not only billionaires — are very much interested in the “evil”, “immoral” capitalist coins (and I’m not even talking about the process of coin mining, that is a topic for another day). Be it short or long-term, profit-making has been the goal of virtually all investors or would-be investors. No single person goes into the cryptocurrency or stock market with the intention of making losses. It will be easier to have your tongue touch your ears than to find one such person who is in the market to simply incur losses. Keep in mind, markets are largely driven by demand, supply, and expectations (rational or otherwise). Thus, it is paradoxical, comical, and hypocritical to chastise the free market system especially when the Forbes rich list is updated, while been religiously glued to the minute by minute fluctuations of cryptocurrencies and financial markets hoping for profits. You cannot eat your cake and have it, or maybe you can.
Today, there is virtually no capitalist economy in the world without some degree of government intervention. Government intervention has increased in capitalist economies and markets since the financial crisis of 07/08, and rightly so. In both monetary and fiscal policy, most governments are now playing a very significant role to ensure that their economies do not falter. While advocates of capitalism disagree with government interventions, they must realize that the solution to solving its flaws cannot be unfettered, unregulated capitalism. For those of us who are aware that markets are not self-correcting, and actors are not as rational as models have long suggested, we remain cautious. Rather than making capitalism an easy target or calling for its overthrow (which is a mere fantasy), here are a few suggestions towards incremental redesigning, reforming, and reimagining of the capitalist, free-market economic model, now and in the future.
Reduce and remove barriers to entry in various industries and sectors to help provide access, promote competition and ensure a level playing field;
Rewrite the rules of the game necessary for regulating markets, corporations, and powerful actors;
Build an effective, efficient, and trustworthy taxation framework for individuals inherited wealth, and corporate entities to ensure tax compliance and sufficient payments;
Effective redistribution and use of taxes — this will help provide a welfare system that caters to the poor, disabled, elderly, and low-income earners;
Address excessive money politics and influence, because failure to do so, many politicians will continue to be bought by the highest bidder. Remember, politics and economics are inseparable, those in power decide who gets subsidies, tax breaks, and contracts;
Revisit the minimum wage, corporate and labour laws to protect workers from exploitation;
Incorporate green and blue economy into sustainable economic models;
Monitor MNCs’ corporate social responsibility and hold them to internationally accepted standards.