The modern capitalistic system has demonstrated its ability to produce goods and services more efficiently and in greater quantity and better quality than any other economic system. Although environmentalists state that natural resources are running out, the population is ever growing, but more food is now produced per head of the world’s population than at at any time in his history.
However, large percentage of the population doesn’t share in the benefits. Today 2.8 million people in the world live on less than 2 dollars per day. It is nearly half the population of the world.Though the wealth of the world is steadily increasing, the world’s richest people are taking almost all of it. And because of this huge, increasing gap between the rich and the poor, common people can afford to buy very little. The disparity between rich and poor continues to grow. This disparity demonstrates that modern capitalistic system is far from ideal of providing the greatest benefit for the greatest number of people.
The reason why capitalism can’t function properly is certainly not that it lacks productive capacity. There are plenty of goods available and manufacturers could easily increase production if there were greater consumer demand. The reason capitalism doesn’t produce more is because customers don’t buy more. The reason why customers don’t buy more is that they don’t have enough money for it. When wealth is concentrated in the hands of a few and not circulating productively, ordinary people have less and less purchasing power. 2.8 million poorpeople represent a vast unused market for food, clothing, shelter, health care and other basic needs. They are potential customers. As a result supply exceeds demand.
Another fatal flaw of global capitalism is debt, encouraging consumers and businesses to buy on credit.Credit plays an important role in economic growth.And the ability to borrow significantly increases the profitability of investments. (The Crisis of Global Capitalism: Open Society Endangered by George Soros). Nowadays corporations spend hundreds of millions of dollars on advertising campaigns to make debt sound desirable and risk-free. Their sophisticated global campaigns and direct mail programs are aimed at every age group, from young teenagers to the elderly. The bankers have for decades created money out of thin air, lent it out at interest and made “debt slaves” of everyone. This process is very important to those in power because when people are in huge debt they are more easilyto control, manipulate. Governments are continuing to help banks drive people into “debt slavery”.
Economic development requires the accumulation of capital and that, in turn, requires low wages and high savings rates. (The Crisis of Global Capitalism: Open Society Endangered by George Soros). That is why governments have for a long time helped to big business and actively allowed to keep salaries down. The last caused “wage slavery”.
A word must be said about industrialisation. The development of manufacturing sector for the sake of economic growth caused environmental pollution. The amount of emissions is steadily increasing. And it is obvious that capitalists will never restrict economic growth to save our planet for future generations.
The cause of this situation is rooted in global competition. Although governments retain the power to interfere in the economy, they have become increasingly subject to the forces of global competition. If a government imposes conditions that are unfavorable to capital, capital will seek to escape. Conversely, if a government keeps down wages and provides incentives for favored businesses it can foster the accumulation of capital. So the global capitalist system consists of many sovereign states, each with its own policies, but each subject to international competition not only for trade but also for capital. This is one of the features that makethe system so complicated: although we can speak of a global regime in economic and financial matters there is no global regime in politics. Each state has its own regime. (The Crisis of Global Capitalism: Open Society Endangered by George Soros).
The system is deeply flawed. As long as capitalism remains triumphant, the pursuit of money overrides all other social considerations. Economic and political arrangements are out of kilter. The development of a global economy has not been matched by the development of a global society. (The Crisis of Global Capitalism: Open Society Endangered by George Soros).
Clearly, we need an economic system that is democratic, protective of the environment and that offers a higher quality of life to all. We need an alternative economy today to help our communities, our countries and the world overcome economic depression and minimize the suffering it causes. We should co-create an alternative to our flawed global economic system.
Elvira ISKENDEROVA
