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Global Crossroads
Garrick Utley, President, Levin Institute 
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Capitalism versus Capitalism
Mon,07/28/08
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Capitalism is a powerful and emotive word. Its proponents see it as the most powerful and positive system for bringing the greatest prosperity to the greatest number of people. Recent economic growth in much of the world, particularly in East and South Asia, is offered as compelling evidence. Skeptics of capitalism see it as a powerful system that leads to growing economic inequality and instability. Karl Marx prophesized that capitalists would end up digging their own graves.
We may not be at that point yet, but with the financial crisis in developed market economies, global inflation trends driven by rising commodity and energy prices, and slowing economic growth many people are looking more closely at, and asking questions about, the capitalist market system. And this is where it gets interesting: we have moved beyond the old debate of capitalism versus socialism to a new one about what kind of capitalist system will work best and dominate our lives as we move deeper into the 21st. Century.
There has always been more than one capitalist model. Over the past few decades the Anglo-American free market system has been the model of choice for many. But now as we see the instability and insecurity generated by the flaws in that system, there is a renewed interest in the social market system as long practiced in Western Europe. European Social Democracy has always been an effort to blend the proven strengths of capitalism with the human values of social equity and individual security. This debate between “free” and “social” market systems goes back to the late 19th Century.
Now, there is a third model, and possibly more, of capitalism being promoted. Example A is China, which may no longer be a command economy controlled by the state, but is an increasingly market driven economy guided by the state and the Communist Party. Just as Marx asserted that capitalism would wither away due to its own internal contradiction, much conventional wisdom today assumes that greater economic freedom will inevitably lead to greater political and individual freedom; that China’s Communist Party will wither away; unable to manage the internal contradictions in its political/economic system.
We can look elsewhere too. How do we describe Russia’s economic system? Is it “free’, “social” or even truly capitalist with the state playing such a dominant role? Then, there are the sovereign wealth funds of energy rich nations. Will their vast assets always be invested for market driven profit motives, or to influence the policies and behavior of certain countries?
Karl Marx claimed that the collapse of capitalism and the rise of socialism, and eventually communism, were historically determined and therefore inevitable. Today, true believers in the positive force of capitalism share a similar faith in the inevitable triumph of free markets and free people. But the course of history is never inevitable. There are several models of capitalism competing today. Can they coexist, or must only one prevail?
What do you think? |
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Sun,10/12/08
By : horace
i believe that both socialst and capitalist systems have their own weaknesses and strengths. fortunately, there are several active and innovative people who makes innovations combining the inherent strenghts of both systems... and it's just so intriguing that different forms of capitalism are battling over each other. lastly, could i ask if the Marx's dream of communism would be gone, does it mean the triumph of capitalism? or just that Marx's ideology, long suppressed in America, is vindicated by the recurring financial crisis? |
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