I happened to come across an interesting blog by George Monbiot. The post that caught my attention was titled “The problem is capitalism” and the subtitle was “It is a weapon pointed at the living world. We urgently need to develop a new system.” (1). Of course, I share the writer’s concern. If we don’t change our ways, this ‘weapon pointed at the living world’ will sooner or later bring on an ecological catastrophe and threaten our very existence. The question is how to change course before it is too late.
What does the term ‘capitalism’ mean? It can simply be defined as ‘an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state‘. For all practical purposes the term is a label for the economies of the industrialized world.
What is the problem with capitalism?
Capitalism isn’t a planned economic system. It is the kind of economy that naturally develops in free and technologically advanced societies. People can use their ambitions, knowledge and entrepreneurial talents to build companies, and technological developments have led to the creation of large and powerful corporations. We can thank this combination of entrepreneurship and technology for our high standard of living. Unfortunately, technology can also be misused for power and profit, leading to the serious problems we face today.
The larger a corporation becomes, the richer and more powerful the people owning or controlling that corporation will be. Money and economic power buy political clout, which in turn can be used to further increase economic power and wealth. Big corporations can get favourable laws and regulations, tax breaks, and subsidies. They can influence the very agencies that are supposed to regulate their industries. Corporations that are successfully sued for criminal activities may pay hefty fines, but the people running those corporations typically get away scot-free. There is no effective deterrent against corporate irresponsibility and crime.
What new system could we devise to replace capitalism?
Any new economic system would surely also have to be part of a lawful democratic society. We would still need to outlaw harmful and unacceptable business practices and be able to enforce those laws. Yet, that new system wouldn’t change human nature. We would still have corrupt and incompetent politicians and irresponsible business leaders. So, how could we expect different results from any new economic system?
What is missing from this picture? We are missing – the citizens, the electorate. Politicians – our representatives – are supposed to govern. We – the electorate – are supposed to choose our representatives wisely and vote the corrupt and incompetent out of office. This is how democracy is supposed to work.
Of course, it isn’t enough to just go and vote. We have to be informed voters. That’s easier said than done in this age of fake news, misinformation, and manipulation. And here is the opportunity – in fact the need – for a new system, a system that provides the voters with objective and unbiased information on issues that matter. We need public discussions led by experts free from conflicts of interest, public meetings where people can get together to debate the issues, and other ways to inform, encourage and engage the electorate. Of course, not every potential voter can be reached, but it only takes a small number of informed and engaged citizens to make a positive difference (2).
The cure for capitalism isn’t a new economic system. It is an invigorated democracy.
(1) The problem is capitalism, George Monbiot The Guardian April 25th 2019 https://www.monbiot.com/2019/04/30/the-problem-is-capitalism/
(2) The ‘3.5%’ rule: How a small minority can change the world, David Robson, BBC Future 14 May 2019, http://www.bbc.com/future/story/20190513-it-only-takes-35-of-people-to-change-the-world