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The riddle of capitalism

The riddle of capitalism. 50025.jpegEverywhere today capitalism is on the ascendant; whether it is in India, China, Russia, Bangladesh or Vietnam. This greatest of man-engineered follies has come on its own at a time when millions of people around the world are on the streets looking for employment.

Whether it’s Spain, Greece, Turkey or France, the numbers of the unemployed continue to grow, threatening the integrity and stability of the world order that has withstood such crises resolutely in the past without any great damage to its social and ideological fabric.

Except that now there is no socialism or communism to give hope to the jobless peasant and proletariat; all must hearken to distant lands and faraway destinations to find work, any work that can feed the belly and clothe the body.

What has gone so wrong with the international order so as to create this calamity of monstrous proportions that cannot be contained either by force or legal fiat?

It is really the systematic and relentless dismantling of the socialist and communist societies of yore by sustained pressure from the West that has spawned this maelstrom from which no country can emerge unscathed.

The destruction of scores of stable economies brought about by the onslaught of the structural adjustment reforms initiated by the WTO under the aegis of the United States has meant that the jobless have nowhere to go except into the streets at the slightest provocation or by reduction of their means by austerity drives launched by their governments.

At one time these jobless people had seen enormous prosperity and an enviable standard of living before the recession began to bite into their livelihoods. Most of these people are unskilled workers, menials, casual laborers and the like, and were formerly employed in large capitalist enterprises that finally folded up due to slackening demand for their manufactures.

In ten years of time from now, if these people are not given some kind of gainful employment, any employment, they may well become the detritus of humanity with gaping mouths and outstretched hands, grasping for any coin or crumb of food thrown to them. These people indeed are the victims of capitalism who aren’t supposed to eat when they don’t work.

Perhaps the human conscience has hardened in the decades of unparalleled prosperity witnessed by the global order after WWII. Now, aid for the hungry nations is no longer forthcoming from the few capitalist nations that are still prosperous – only fancier and fancier loan packages with punishing conditions so as to make them totally unpalatable to any decent government in need.

Prime Ministers and Presidents have come and gone from the contagion-affected nations without being able to arrive at any solution to their countries’ problems in spite of possessing enormous influence and persuasive power in the capitals of Europe and North America.

However, the so-called “emerging economies” of Southeast Asia seem to be enjoying enormous riches and unprecedented standards of living without being affected by the contagion in Europe. Indeed, the “tiger” economies of South Korea, Thailand, the Philippines and Malaysia and others in their vicinity, owe their prosperity to the capitalist ideas of development adopted by their leaders.

The emerging tiger economies of Southeast Asia are manufacturing everything, ranging from fans to furniture to futuristic machines and nuclear equipment. Yet all these countries have a vested interest in exporting their output to North America and Europe, if possible, or to other underdeveloped nations in Latin America, the Middle East and those in close proximity, at cheap rates, far cheaper than the competition from Japan, Western Europe and North America.

All the tiger economies are optimistic about the future; most are beefing up their defense outlays and military budgets in keeping with the rise in their GDP. Even China, that last surviving bastion of communism, has diluted its socialist ideology to pave the way for capitalist reforms. It is also actively seeking entry and full membership into the World Trade Organization (WTO).

So great is the confidence of China’s leaders in making their country an “economic powerhouse” that in the future will rival and even surpass the United States in almost every branch of economic endeavor!

The United States, too, has given full marks to China and considers it to be an economic and military power to be reckoned and engaged with. It has also expressed its willingness to join China in shaping the global political and military scenario in the decades to come since Russia seems to have retreated from those responsibilities due to pressing economic concerns at home.

The basic, fundamental and underlying problem with the emerging economies (including that of China) of Southeast Asia is the same in-built flaw that seems to be crippling vast regions of Europe today. How long can China continue to make and sell its output when there is an equally hungry band of tiger economies that is vying for the same markets that China now dominates?

How much demand can North America and Western Europe generate for China and the other tiger economies when the cry for self-reliance and self-sufficiency through indigenous manufacturing is becoming more vocal and strident in almost every country from South America to Turkey? No leader worth his mettle can still glibly talk of importing electrical generators from South Korea or Thailand when the domestic industries too are beginning to show undue interest in bagging these contracts.

Japan is a beggar nation; so greatly dependant it is on selling its output to the United States and Western Europe and adapt to the resultant influence on its foreign policy. China, too, could follow Japan’s example and learn to beg and bow before America just so that it can release its goods in the latter country. Indeed, China, that much-touted economic powerhouse, could collapse like a pack of cards if its goods are denied entry into North America and Western Europe through imposition of crippling tariffs.

Then, too, the West led by the United States, has an active interest in seeing its other trade partners and allies, such as South Korea and Thailand, exploit and benefit from its markets. Can China maintain the current momentum of its consumer exports after the next decade or so? Who will it then turn to sell its wares in a market that is increasingly crowded with cheaper competitors? Will it use force to open up markets in Southeast Asia where traditionally it has exercised hegemony?

That dispensation is unlikely because even the victims of China’s past hegemony have developed military teeth and claws with American help.

This, then, is the riddle of capitalism, its’ tragic dialectic: waves of unprecedented prosperity followed by periods of prolonged poverty and destitution on a massive scale. If those countries of Europe that are suffering from the contagion of structural adjustment policies do not adopt a planned and rational approach to their economic and social development, then even genocide is possible if the numbers of unemployed continue to grow at the present rate.

The same is true of China and the emerging economies of Southeast Asia.

Socialism may yet find a solution to present-day problems if the rich countries curb their greed and desist from launching smear and propaganda campaigns to malign it, especially through the western media with its distorted news coverage and yellow journalism.

NOTE: The author is an Honors graduate in Interdisciplinary Studies in the Humanities from the University of Chicago and has studied Political Science and Economics at Albright College in Reading, Pennsylvania. In addition, he was a student in Public Administration and Economic & Social Development at the University of Pittsburgh.

Author: Kamal Wadhwa

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