I felt considering my many discussions with those whom consider themselves socialists, and, left leaning, and those that consider themselves conservative or the far right, that I present some points to better explain the current state of capitalism. Those on both sides will draw their own conclusions. I am not providing the strategy, the quick fix or the blueprint in fixing the underlying flaws in the arguments of both sides. I am presenting some facts to provide both sides with some objectivity.
1. Capitalism has no rival on the world economic stage. No other economic system competes with it. There are some macro-economic philosophies that are being trialled but none can be globalised like capitalism without political empowerment of fascism.
2. Capitalism will not implode. But if nothing is done about the inequalities and imbalances, it can stagnate.
3. Capitalism can lead to financial inequality. A failure for governments to adequately regulate, and to use progressive taxation exacerbates inequality.
4. Capitalism has been the greatest system for success, growth and improvement for the last four hundred years at least, and, has led to rapid increases in the standard of living around the globe.
5. Since the 1960’s, the rate of global economic growth has steadily slowed from around 5% plus annually to under 2%.
6. Evidence has shown that more tax breaks provided for the higher middle class, and wealthy, leads to lower re-investment in the market and a decrease in growth.
7. The growing imbalance in equal distribution of income has led to growing social unrest and conflict around the globe.
8. The 70’s and 80’s marked the first time in US history that workers real wages declined through-out two consecutive decades.
9. Since 1998 workers real wages have declined in Australia in direct correlation to the Australian governments war on the wharfies.
10. The war on inflation is outdated and economic suicide as described by our leading Australian economist in 2006, yet globally governments continue to restrain job growth to keep wages down.
11. Unregulated Capitalism becomes the snake that eats its own tail, taxation, regulation and wealth distribution have been the only way to economically redistribute the wealth in a non-violent way.
12. The previous way that wealth was redistributed prior to the creation of the modern global economy was through invasion, thievery and revolution. Many modern countries still use these methods as economic models to redistribute wealth.
13. Modern capitalism has led to greater global safety and a reduction in citizen deaths by over 80% in the last decade alone.
With these statements in mind the underlying influences in the global economy over the last 30 years have been-
1. The removal of communist regimes - almost a third of the planets humanity and an additional 30% of the globes land mass joined the capitalist market over the last 30 years.
2. Information technology - the increase in information technology and data storage has led to an economy that is not natural resource driven. For example, software, social media, social media marketing etc.
3. New demographics – The global age is getting older and the wealth is being redistributed due to mismanagement. Wealth is flowing from rich countries to poor due to poor global trade agreements.
4. The global economy — Today, anything can be made anywhere and sold anywhere else. The global economy is growing increasingly interconnected.
5. The removal of economic super powers - No world super power can make and enforce the rules of the economic gains in the 21st century, large military super powers are trying through strategic conflicts, but due to the advancement of information technology and suburban terrorism, a country and its army can still be brought to its knees by a singular extremist.
Since the creation of modern capitalism, it’s obvious weakness was its tendency to give rise to growing disparities between the haves and have-nots. The question is what to do about this long-standing weakness. During the Golden Eras of the last 200 years, high levels of taxation on the wealthy and massive estate taxes were used to redistribute the wealth and create greater social harmony, increased apathy and decrease both violence and crime. However, in this age of blatant global economic bribery, corruption and nepotism there is no political will and still relatively little social will to change the status quo.
The first steps to understanding the sacrifices that may need to be made is to honestly navigate the uncertainty ahead with courage.
