How we landed here
I preserved this T-shirt as a souvenir, which I bought in Bangkok in 1991 while I was with UNICEF in Vietnam. 
The motto in this T-shirt seems to have fully realised with Vietnam and People’s Republic of China adopting Capitalism as the model of their national economy. Capitalism is now the CEO of the global financial system based purely on production of organised profit owned largely by private individuals. Is this CEO satiated with all its achievements or is it still hungry for more? Given the recurring economic turmoil and spread of inequality worldwide what would be the lifespan of Capitalism? Has the potential of Capitalism reached its ceiling? If yes, is Capitalism the final destination of global economic policy? The democratic governance of all shades embraced Capitalism as the global economic system, not with a consultative process but became default as it was pushed by global institutions such as the World Bank and the International Monetary Fund backed by powerful economies. The world is dynamic so one might ask what is the future of Capitalism.
What did we get from Capitalism?
Capitalism helped spread industrialisation, encouraged entrepreneurship, amplified job creation, encouraged marketing & consumption and crafted efficiency across all sectors of production through privatisation and generated enormous amounts of wealth. One of the biggest achievements of capitalism is innovation through competition where achievers are rewarded. It also created choices for people (how many types of milk and yogurt you can buy?). It strengthened global trade and investments with capitals provided by private banks. At the end of WW2, the global GDP was $11.74 tr (1950). It increased to $59.63 tr by 1990 at the time when communism was collapsing. The world GDP reached $166.65 in 2023 with privatisation, industrialisation, deceptive marketing and excessive consumption. In this dynamic world one obvious question is will this miracle system last forever or is it transient or is it just a mirage - a blink in human history? Would Newton’s theory of what goes up must come down apply to capitalism?
Rule of law and capitalism
Capitalism operates by its own rules with its own justification, which often means bending the rule as it moves on. Capitalists, not the governments, have virtually taken control of all natural resources such as fertile land, underground resources - oil, gas, minerals, forests, water, etc. The rule books of the governments are often dictated by overly opinionated capitalists with the wealth generation as the main destination, which also happens to be the aim of the governments everywhere – to show growth, but no concern on social equity. These activities generate employment for people which no one can question. Rule of law is supposed to guarantee fairness, rights and due process for all decisions and protect people from coercion and abuse. But the negative impact on people, environment degradation, loss of private lands is never questioned. Governments are supposed to be for people but generally the governments are seen to be serving mostly the capitalists as opposed to average citizens. The failure lies in the fact that profit supersedes service to people. Governments are operating like software full of bugs which need to be cleaned or edited.
Known fallouts but not acted upon
Capitalism has only two gears, competition and creativity. Medium businesses take over small businesses and big businesses take over medium businesses and when big businesses fail the government rescues them. Would you call this a competition; in capitalism if one fails it would have vanished. AI is the latest product of creativity which has mesmerised the general public. Considering the way the idea of competition is applied and the application of AI, it feels like competition and creativity have crossed all legal boundaries and begin to be destructive. Did Capitalism simply create hegemonistic society without consent without a rule of law? Capitalism attaches monetary value on everything causing degeneration of social values and moral principles. Capitalism has also hijacked the independent media as a result the public opinion has become superficial, if it actually exists. With the absence of independent media, it is as if the citizens do not have defence lawyers to plead against the wrongdoings of Capitalism.
What if
It is not an exaggeration to suggest that no system is perfect as every system has its positive features and misgivings. In the post-WW2 world, democracy and communism coexisted for decades. Poverty flourished in large segments of population in communist countries. Looking at today’s Vietnam we may ask a hypothetical question - what if Vietnam was never under international embargo. Vietnam was criticized for lack of democracy and dictatorial regime. But when we look at Vietnam today - still a communist state and dictatorial - the state of infrastructure, education level, access to social services, narrow gap between the top decile and the bottom decile and unbiased rule of law, the idea of Capitalism as viewed in the West might look a bit pale. Vietnam applied capitalism in their own way that suits their centralised one party led communist system. Vietnam is criticised for lack of rule of law and freedom. But who decides this - Vietnamese living in Vietnam or western elites with their disdain for non capitalist economies? The Vietnam war started with the aim to stop the spread of communism but today Vietnam is still very much communist, same as China. (The propaganda against communism by the West was unbelievably effective. Here is an example. I was visiting Indonesia in 1984 to meet professor Djokomulianto to learn about the iodine deficiency programme in Indonesia. There was a note in the immigration form in Jakarta airport which reads something like ‘anything Made in China is not allowed - must be left in the airport’.)
Meanwhile Singapore is as democratic as democracy can be and Singapore is also as Capitalists as a Capitalist can be but it is also dictatorial and flourished without any natural resources of its own, except human resources. The commonality between China, Vietnam and Singapore is the equal application of Rule of Law and be able to prevent capitalists from manipulating the governance – they managed to tame capitalism. What would a communist Vietnam be today if it was never under international sanctions?
In China and Vietnam, with one party system, their policy is long term as they do not have to compete with rival political parties to show immediate results or take orders from lobbyists. In both countries the Head of State can only have two terms, although China made an exception recently. In a simplistic term, it seems like in countries with western style democratic governance Capitalism dictates the governance while in authoritative government the governance has control over Capitalism as in Singapore which is fully democratic but also dictatorial. It is up to the academics, politicians and the economists to interpret which system is delivering best to their citizens. In the contemporary world irrespective of how Capitalism performs all systems of governance must address two critical issues: income inequality and environmental governance. If we fail to do this the future generations will have no means to survive.
Are there alternatives to Capitalism?
The new dawn of AI is changing the working environment of business worldwide with increased automation of production and marketing suppressing many jobs. it will also speed up extraction of natural resources including fishing, mining extraction in the ocean floor, etc. It is time to look for alternative economic policy to save us from the looming collapse of the economy and possibly civilization itself. So, what are the options? There are 96 Nobel Prize winners in economics as of 2024 (62 of them are Americans). Among those who are still us today, what is their position collectively on the current state of Capitalism and its impacts? The world needs a conclave of those laureates and other prominent economists to pave a new path to design an equitable economy to move away from an economy designed by politicians and private sector.
Read more articles by Ramesh here.
Or contact Ramesh at ramesh.chauni@gmail.com
Labels: Ramesh
The motto in this T-shirt seems to have fully realised with Vietnam and People’s Republic of China adopting Capitalism as the model of their national economy. Capitalism is now the CEO of the global financial system based purely on production of organised profit owned largely by private individuals. Is this CEO satiated with all its achievements or is it still hungry for more? Given the recurring economic turmoil and spread of inequality worldwide what would be the lifespan of Capitalism? Has the potential of Capitalism reached its ceiling? If yes, is Capitalism the final destination of global economic policy? The democratic governance of all shades embraced Capitalism as the global economic system, not with a consultative process but became default as it was pushed by global institutions such as the World Bank and the International Monetary Fund backed by powerful economies. The world is dynamic so one might ask what is the future of Capitalism.
What did we get from Capitalism?
Capitalism helped spread industrialisation, encouraged entrepreneurship, amplified job creation, encouraged marketing & consumption and crafted efficiency across all sectors of production through privatisation and generated enormous amounts of wealth. One of the biggest achievements of capitalism is innovation through competition where achievers are rewarded. It also created choices for people (how many types of milk and yogurt you can buy?). It strengthened global trade and investments with capitals provided by private banks. At the end of WW2, the global GDP was $11.74 tr (1950). It increased to $59.63 tr by 1990 at the time when communism was collapsing. The world GDP reached $166.65 in 2023 with privatisation, industrialisation, deceptive marketing and excessive consumption. In this dynamic world one obvious question is will this miracle system last forever or is it transient or is it just a mirage - a blink in human history? Would Newton’s theory of what goes up must come down apply to capitalism?
Rule of law and capitalism
Capitalism operates by its own rules with its own justification, which often means bending the rule as it moves on. Capitalists, not the governments, have virtually taken control of all natural resources such as fertile land, underground resources - oil, gas, minerals, forests, water, etc. The rule books of the governments are often dictated by overly opinionated capitalists with the wealth generation as the main destination, which also happens to be the aim of the governments everywhere – to show growth, but no concern on social equity. These activities generate employment for people which no one can question. Rule of law is supposed to guarantee fairness, rights and due process for all decisions and protect people from coercion and abuse. But the negative impact on people, environment degradation, loss of private lands is never questioned. Governments are supposed to be for people but generally the governments are seen to be serving mostly the capitalists as opposed to average citizens. The failure lies in the fact that profit supersedes service to people. Governments are operating like software full of bugs which need to be cleaned or edited.
Known fallouts but not acted upon
Capitalism has only two gears, competition and creativity. Medium businesses take over small businesses and big businesses take over medium businesses and when big businesses fail the government rescues them. Would you call this a competition; in capitalism if one fails it would have vanished. AI is the latest product of creativity which has mesmerised the general public. Considering the way the idea of competition is applied and the application of AI, it feels like competition and creativity have crossed all legal boundaries and begin to be destructive. Did Capitalism simply create hegemonistic society without consent without a rule of law? Capitalism attaches monetary value on everything causing degeneration of social values and moral principles. Capitalism has also hijacked the independent media as a result the public opinion has become superficial, if it actually exists. With the absence of independent media, it is as if the citizens do not have defence lawyers to plead against the wrongdoings of Capitalism.
What if
It is not an exaggeration to suggest that no system is perfect as every system has its positive features and misgivings. In the post-WW2 world, democracy and communism coexisted for decades. Poverty flourished in large segments of population in communist countries. Looking at today’s Vietnam we may ask a hypothetical question - what if Vietnam was never under international embargo. Vietnam was criticized for lack of democracy and dictatorial regime. But when we look at Vietnam today - still a communist state and dictatorial - the state of infrastructure, education level, access to social services, narrow gap between the top decile and the bottom decile and unbiased rule of law, the idea of Capitalism as viewed in the West might look a bit pale. Vietnam applied capitalism in their own way that suits their centralised one party led communist system. Vietnam is criticised for lack of rule of law and freedom. But who decides this - Vietnamese living in Vietnam or western elites with their disdain for non capitalist economies? The Vietnam war started with the aim to stop the spread of communism but today Vietnam is still very much communist, same as China. (The propaganda against communism by the West was unbelievably effective. Here is an example. I was visiting Indonesia in 1984 to meet professor Djokomulianto to learn about the iodine deficiency programme in Indonesia. There was a note in the immigration form in Jakarta airport which reads something like ‘anything Made in China is not allowed - must be left in the airport’.)
Meanwhile Singapore is as democratic as democracy can be and Singapore is also as Capitalists as a Capitalist can be but it is also dictatorial and flourished without any natural resources of its own, except human resources. The commonality between China, Vietnam and Singapore is the equal application of Rule of Law and be able to prevent capitalists from manipulating the governance – they managed to tame capitalism. What would a communist Vietnam be today if it was never under international sanctions?
In China and Vietnam, with one party system, their policy is long term as they do not have to compete with rival political parties to show immediate results or take orders from lobbyists. In both countries the Head of State can only have two terms, although China made an exception recently. In a simplistic term, it seems like in countries with western style democratic governance Capitalism dictates the governance while in authoritative government the governance has control over Capitalism as in Singapore which is fully democratic but also dictatorial. It is up to the academics, politicians and the economists to interpret which system is delivering best to their citizens. In the contemporary world irrespective of how Capitalism performs all systems of governance must address two critical issues: income inequality and environmental governance. If we fail to do this the future generations will have no means to survive.
Are there alternatives to Capitalism?
The new dawn of AI is changing the working environment of business worldwide with increased automation of production and marketing suppressing many jobs. it will also speed up extraction of natural resources including fishing, mining extraction in the ocean floor, etc. It is time to look for alternative economic policy to save us from the looming collapse of the economy and possibly civilization itself. So, what are the options? There are 96 Nobel Prize winners in economics as of 2024 (62 of them are Americans). Among those who are still us today, what is their position collectively on the current state of Capitalism and its impacts? The world needs a conclave of those laureates and other prominent economists to pave a new path to design an equitable economy to move away from an economy designed by politicians and private sector.
Read more articles by Ramesh here.
Or contact Ramesh at ramesh.chauni@gmail.com
Labels: Ramesh
Thank you for your comment. Hope you are well
ReplyDeletea good recommendation
ReplyDeleteGreat article, as usual. Love that T Shirt also. The Jubilee Report above has some of the answers to your concerns.The problem is that we all know what the issues are, but can’t seem to direct our energies towards solving some of them at least. In fact we seem to be trying to do our best to augment the problems..look at the fantastic increases being budgeted for military and security matters!
ReplyDelete