Mahfuz R. Chowdhury :
(From previous issue)
Capitalism had originated in Europe to essentially supersede the social system known as feudalism. The ultimate transformation from feudalism to capitalism, however, came through a process of democratic movement to replace autocratic regimes with rule by well-to-do middle class men. Democratic ideas grew primarily to facilitate the growth of capitalism, and not necessarily to give political rights to the public. The term capitalism was used to describe a system to promote private investment and industry with little or no governmental control. Of course, capitalism has since undergone many changes.
European countries, from where capitalism began its journey, have since transformed themselves into different welfare states by adopting many of the socialist policies that communism had advocated. In Sweden, for example, the government plays such a role that public spending makes up more than 50 per cent of its total gross domestic product. Even the United Sates, the main benefactor of the capitalist system, have taken up a number of these policies, though to a somewhat lesser extent.
Universal health insurance, unemployment benefits, social security for the elderly, welfare benefits for the poor and the disabled, government regulation of private industries, workers’ rights to unionize, and minimum wage that the industrialized countries have been forced to adopt are good examples of the type of changes that the communist movement has successfully brought to capitalism. These changes didn’t come easy ¾ they were achieved through long and sustained labor and democratic movements over time.
It should be noted why the European countries provide for a much better safety net for the people than the United States. This is because in the United States big business can sway government policy for its benefit, while in Europe the public is able to exert more influence over government policy. Thus, while pure communism may have ended, so did pure capitalism.
Though capitalism has become the dominant system now, what the world actually has is a mixture or combination of the two systems, and the system itself may not be uniformly practiced everywhere.
For now, communism may have lost its war, but capitalism hasn’t necessarily won the battle yet. That battle is fundamentally about the elimination of poverty from society – which is the very basis of the argument for communism. And even if technological progress somehow achieves the goal of ending poverty, capitalism faces another critical problem: the exercise of political power in its system.
In the United States, for example, the concentration of money in just a few hands enables a handful of people to have disproportionate influence on the political outcome. In this way, capitalism, through the creation of rising inequality, may be destroying democracy. This is a serious danger and it may be one of the biggest future challenges for capitalism. Somehow, society needs to establish equal political power for all even when economic power is unequally distributed. This may be achieved ¾ as in some European countries ¾ by the public financing of elections. That process may not fully ensure that the rich and the poor will have equal political power, but it’s more likely to limit the political clout of the rich and possibly open more opportunities for the poor.
Finally, another serious threat to capitalism is social unrest, especially among the critically distressed people of developing countries who see few ways to achieve their goals. Invariably, such hopelessness fuels social unrest. Although social unrest is not at all likely to go away, ending today’s massive world wide poverty and providing equal opportunity for all, would go a long way in creating a less contentious society. The affluent countries indeed have an obligation to make that happen. So, what lies ahead for the world, and whether communism resurfaces in some different form, depends entirely on how the present capitalist system meets these and other challenges that may come in its way.
(Concluded)
(The author currently teaches economics at Farmingdale State College, New York)
