Has Capitalism improved the world? Or is Capitalism an ideology that has
destroyed the world? "Hello,
friends!" Welcome to the third
episode of the Basics series. Come let's
understand the successful ideas of Capitalism and its failures. Starting with the positives: The largest successful idea of Capitalism
might be Decentralisation. "In
capitalist countries, everyone has the freedom to start their own
business." Even you can start a
business. And every year there are lots
of new businesses starting up. These
businesses work independently from each other.
It means that they are Decentralised.
"In fact, they compete with each other which leads to
innovation." "On the other
hand, in communist-socialist countries like the Soviet Union," everything is controlled by the government. All major production areas and industries are
controlled by the government. There is
only one point of control. Centralisation.
For the top few people to control all the productions means
of the country and to balance the
economy is very difficult. This is
believed to be one of the major reasons for
America's win against the Soviet Union during the Cold War. "Because of the central planning of the
Soviet Union," their growth was far
less when compared to America's. When
these numerous decentralised businesses
in capitalism "work
independently," They will also
compete with each other to better themselves.
They get a financial incentive here: the Profit. "To earn this profit, the businesses
would want to work better." "Better
than their competitors, which will lead to innovation." So Capitalism provides a financial incentive
that triggers Innovation. "Because
of this innovation, in the last 100-200 years, in Capitalism" we have seen a level of technological
development that we had not seen in the
two thousand years of human history. Think
about it. "Cars, Airplanes,
Internet, Computers, Cameras," all
these were invented in the last 100-200 years.
People favouring Capitalism also argue that "because of it, in the last 50 years,
poverty has fallen globally." The
education level of people have risen And
the overall living standard of people has improved a lot. Another positive point of capitalism has been
that it lets everyone dream. That you
too can reach the top if you want. Everyone
has a chance to reach the top. "If
you work hard, you too can become like Bill Gates or Elon Musk." "Whereas, in a Socialist and Communist
system," it is not possible for you
to become that rich. "Additionally,
a consumer, in a capitalist system,"
has more options in every aspect of life.
Take India's example.
There was a time when there was only one channel on television:
Doordarshan. Which was run by the
government. "But when the
television sector was opened up for privatisation," "and there was a free market, you have
numerous options today." There are
so many channels on TV. Your choices have
increased manifold. Your entertainment
value has increased. It has similarly
affected several other sectors. Many
people will list out these benefits of Capitalism that I told you and will promote this ideology without a
second thought. They'll promote
privatisation. But it is important to
understand that there are several adverse effects as well. "In fact, some of them are so harmful
that they may destroy the world." Why
am I saying so? Come let's find out. The
first failure of Capitalism is Monopoly
and Income Inequality. I talked about it
a bit in the last Blog as well.
"It's true that Capitalisation has Decentralisation," "that you have the freedom to start your
business," "but realistically,
what happens is that businesses merge among themselves." Large businesses often takeover smaller
businesses. It possible here that one
business may buy out all its competition
and they become only one company.
"If there is no more competition and one company rules the entire
sector," it is termed as Monopoly. This is often seen in Capitalism.
"Once a company establishes a monopoly," "it is terrible for the consumers
because the company may increase the prices," it may even exploit the consumers. "Like nowadays in India, many people
believe that Jio almost has a monopoly"
"in the telecom sector, and the other companies are not able to
compete with it." Another phrase
used in Capitalism is 'Acquire or Get Acquired.' Suppose you're a fish in a lake. "Either you grow by eating other
fishes," or a bigger fish will eat
you. Capitalism works similarly. Either you start acquiring other companies to
grow yours or some bigger company would
absorb you. Do you remember there used
to be a company Jabong? Myntra acquired
that. And Myntra was later acquired by
Flipkart. "And then came the
international giant, Amazon." Flipkart
had two options. Either Amazon acquired
it or Wal-Mart. "Today, the
companies termed monopolies have become so" by acquiring other companies. "In social media, Facebook is considered
to be a monopoly" "because
Instagram and WhatsApp, that are the two most used social media apps," are owned by Facebook. Google is also said to be a monopoly in the
world of the internet "because
YouTube, through which you are watching this, is owned by Google."
Android is owned by Google.
"Google Maps, Google Shopping,
Google Pay, Google Loans" "In
fact, the parent company of Google, Alphabet," has acquired 241 companies. What I mean to say is that this whole system
creates inequality. "Where the rich
people and the rich companies have all the wealth," and the small businesses cannot compete with
them in reality. "In theory, there
is competition in Capitalism but in reality," how can small businesses compete with these
monopolistic giant companies? "In
the last 30-40 years," "since
the neoliberalism ideology staged a comeback globally," income inequality has risen rapidly across
the world. "It was reported in 2017
that the top 1% of people," control
over the 82% of the new world generated in the world now. "The richest 42 people in the
world," hold as much wealth as half
the population of the world. That 3.5
billion people collectively own. It is
not possible that these 3.5 billion people are extremely lazy and only these 42 people have worked hard to
get this rich. There is no direct
co-relation with hard work. "Like I
explained in the previous Blog," the capitalist system works like this. Those who have wealth can create more very
easily. "The ""Money
Begets Money"" concept." "And
the other thing that I told you now, 'Acquire or Get Acquired.'" Either eat small fishes and grow or some
bigger fish will gobble you up. "Thirdly,
there's another saying similar to ""Money Begets
Money""." Poverty Begets
Poverty. The poor people do not have the
capital to invest. "If they don't
have the money to start with, it will be extremely difficult for them to
rise."
They would not be able to spend on their education or health "and eventually, they won't be able to
generate wealth." "To counter
this, the governments of many countries provide free education." I'll talk about it later in the Socialism Blog. The
next failure and probably the greatest failure of Capitalism has been Environmental destruction and Societal destruction. "On one hand, I said that the poverty
rates have drastically fallen the last 100 years," "literacy and education rates have risen
rapidly," "In the same 100
years, the environmental destruction that we've seen" "hasn't been seen in 2000 years, or even
the entire human history." "The
speed of deforestation, extinction of biodiversity and increasing climate
change," is unprecedented. "And this happened because in
Capitalism," companies focus only
and only on their profits. They are not
concerned about the global effects of deforestation. As long as they keep getting their profits
and keep getting richer. "This
craving for profit is not only destroying our planet," but it also negatively affects our society
tremendously. It's true that consumers
have choices. They're free to choose
what they want to buy from which company.
"But in reality, companies bombard us with ads." These changes the mindset of the entire
society. "In the ads, it's shown
that the chemically altered, processed, fatty burger" is very good for you. You'll be happier when you eat it. And when you'll see numerous burger stores
around you selling these burgers "when
your friends and family members would want to eat here,"
you too would want to eat there. "You'll want to eat this burger, which
will eventually lead to obesity." "In
America, 34% of adults suffer from obesity." "In the list of countries where the
cancer rates are very high," America
is at number 5. America is a capitalist
country where a free market has been given to fast food "like the brands of sugary drinks," "they can sell whatever they want, run ads showing whatever they want." All for the sake of earning profits. "In fact, to earn profits, companies
have misled consumers into buying things"
which were harmful to them. Things
people didn't need but their demand was created by the advertisements. Major examples of this are the tobacco and
alcohol companies. They run ads that
make people feel having their product will make them proud they'll get the respect of society. But every example is not this extreme. It gave rise to Consumerism as well. Think about 50 years ago. What did a common man need? What did the society consider necessary for a
common man to have to lead an easy life?
"A house, a secure job and good food." "Nowadays, how many more things do you
need to be at a respectable level in society?"
"You need a house, a car, a mobile phone, at least 10
new clothes, shoes," and every year
or two you need to get new clothes. Only
then will you be considered at a respectable level in society. "But think about it, 50 years ago, how
many clothes and pairs of shoes" did
your grandparents and great-grandparents own?
This capitalist system forces people to buy this and that and everything. The more you buy the better. The more new things that you have is good for
you. "The latest iPhone and the
latest car model," the more you buy
and the more you consume is better. Why?
Because the companies will get more and more profits. This system works on the model of infinite
consumption. As many people buying as
many things that they can. "But in
reality, the resources are finite."
And this reason why we are seeing a large scale environmental
destruction because of Capitalism. This system attacks your insecurities is to
sell products. "If your skin is
dark, buy a fairness cream." "If
you're a bit hairy, buy this laser treatment." "If your lips, nose, face is not the
same as such and such top celebrity,"
buy these new surgeries. "You're
short, buy this new drink to getter taller." "And finally, I'd like to talk about the
failure of capitalism to protect democracy worldwide." "When compared with communism,
capitalism has historically" been
better suited for democratic structure.
There have been dictatorships in communist countries
frequently. But capitalism worked well
with democracy and thrived. I am not
saying that there weren't dictators in capitalism. There were; as I talked about it in the last Blog. "But
in general, capitalism has a better record." "But the failure of this system, this
ideology is seen when" companies
get so huge and have so much wealth that
they become more powerful than the government. "In such cases, the companies can easily
bribe the governments," buy out the
governments and even help in manipulating the elections. Companies are concerned with their profits
only. "If they feel that they'll
get better benefits if a particular politician wins," they'll fund that politician and support
their election campaign. "This
might happen publicly, like in America, known as Lobbying." This is legal in America. Which I believe to be extremely wrong. "In countries like India, it isn't very
apparent." Especially since the
passing of the electoral bonds. Which
company is funding which political party?
We have no idea. "But
overall, all the companies will help that political party to win" that will give them the most benefits. This corruption can work in all aspects and
is very harmful to every country.
The company might pay money to the government coercing them into selling forest land to
them. To put the forest on sale. And the government would comply. Companies may ask for the rules to be changed
in such a way that "though the
citizens may suffer, the companies are benefited." The government would comply. The government would basically become puppets
in the hands of the companies. This is
often an accusation against countries like America. "To deal with these failures of
Capitalism," countries around the
world have come up with different strategies.
What are the strategies? I'll
talk about them in the next episode where I will explain Socialism. Which are the socialist ideologies that have tried to counter the various
failure of capitalism. If you like the
blog then share it. Comment below your
opinion on these ideologies. So that I
can keep making such informative blogs for you.
Let's meet in the next blog. Thank
you.