The title is probably causing a bit of confusion, isn’t it ? However, my intention is not to cause any confusion, but to ask myself and hopefully others a simple, but an honest question. And that is, when it comes to capitalism vs socialism debate, are we really taking sides based on our bias and the narratives that we tend to subscribe to, or somewhere, we are in fact looking to find a model that is sustainable, and also something that works better for the society then, what we have now ?
But before conceiving my thoughts, I do want to start by establishing a simple fact that, capitalism and socialism were both conceived as an idea of an economic model that will serve the global human society. A system that will be at the service of the super organism known as the global human society that is always aspiring to live in a world of abundance and permanent prosperity. And that’s basically the underlying theme.
So in short, the global human society is looking for a system that can deliver permanent prosperity, without ever questioning the capacity of any such system to carry an over growing human society and its overall impact on the larger ecosystem. Now, you may ask, is there anything that I could add to the debate, in terms of value, or am I just going to recycle an old opinion ? Well! bashing capitalism is in fashion, and we keep hearing how capitalism isn’t working and also how it is failing a large section of the society. And yes to a large extent, it is true. The evidence can’t be dismissed or ignored.
For a while now, my own view has been that, the current structural design of capitalism needs an urgent upgrade especially if it is to stay relevant. And in a way, it is good to see that, the global community is not only debating the issue, but the discussions seem to be reaching a point where people have more or less concluded that something needs to be done. But the obvious question then is, what exactly are we talking about ? Are we talking about Socialistic model for the economy, where we heavily tax the rich, and then let a government somehow find a way to redistribute that wealth through policies driven initiatives? Well! if that’s the way we want to go then, I am afraid we aren’t really looking at solving the problem.
If we all agree that capitalism is failing to deliver, distribute, and then redistribute opportunities and prosperity to masses then, replacing it with a socialistic model isn’t really a solution. It is surely a very popular solution, especially among those who are convinced that capitalism is somehow pure evil. But that sort of mindset is somewhat self defeating, because we are front loading our inherent bias in our opinion. What we do need to remember is that, any human ideas including of the idea of a God, comes with design flaws. And over time these design flaws become more prominent causing the system to become inefficient. Also any system will have capacity limitation, and after a point, it will start to become inefficient.
The ability of any idea or a system for that matter to stay relevant has a time limit . Even the international space station needs a regular nudge to stay in the orbit, or the natural orbit decay will bring it crashing down to earth. To keep any system relevant, you do need to continuously upgrade it. And therefore upgrading the inherent design flaws within the current model of capitalism is only a natural step forward. I would say that reinventing capitalism is probably the need of the hour, but we will also need to factor in our unstoppable desire for continued abundance and a world of forever prosperity. Because there will always be a cost.
And therefore while conceiving the upgrade, we do need to be mindful of the fact that, we as human being aren’t as good as we think we are at times, especially when it comes to allocation and distribution of resources. We continuously chase the world of abundance without realising that, all of it comes at a cost. Most of our learnings comes from nature, and we need to look at nature, when conceiving a sustainable economic model for our society. For billions of years now, nature has been working tirelessly on distribution and redistribution of resources, and it is probably still learning.
Building up of stress and imbalances is part of the natural design of what we call nature. So to assume that somehow, the upgrade will solve all the design flaws within capitalism, and the society will then live happily ever after, is probably nothing more than a wishful thinking. Because quite frankly, it won’t, and we all know that. As a global human society, we are a big part of the problem. And on the other hand, the existing socialistic economic model puts the government in control, at least that’s remedy the model prescribes. To some of us, it probably does make sense to have a government run the society as well as business. However, a government’s ability to efficiently allocate resources through policies is marred in red tape , and I am saying this in the politest of ways possible. I say that because there are more than enough evidence to make such a conclusion.
Now does that mean there is no cost to the society for operating the economy under a free market economic model ? Well! there is no such thing as no cost. Every bit of energy we use to power our living has to be repaid, that’s just the natural design. In its truest form, a free market economy is one where the allocation of resource is decided by supply and demand dynamics, without the need of any government intervention. But there are incidents where free markets economy can get itself into a black hole, requiring governments to intervene in the interest of the society. And while governments do bail out businesses, it is the society that shoulders the burden of the bail out, and the brunt of the aftermath, be it through austerity or any other such measures taken by the government to support businesses and the economic system.
There are some companies today that have become a market in their own right. Take for example companies like Microsoft, Amazon, Google, Apple, and Facebook among others. Some free market practitioners would argue about the benefits of scale, and they may have a case. But when you look in the context of what’s in the greater good of the society then, you may want to put in mechanisms to safe guard the society. You could make a case that, the idea of pursuit of abundance at any cost, and also the narrative that greed is good, is what makes the free market economy an unreliable partner of the society.
So therefore, the society continues to struggle to fully trust large corporates and their billionaire promoters and executives. Self regulation and self discipline only works when we are convinced that, the process is completely in our own interest. And thus, a betrayal will in fact be us betraying ourselves. We do need to relearn the idea of society, and ask ourselves an important question. And that is, what happens to larger companies and free market if there was no society ? Having said that, free markets have contributed immensely to the greater good of the society. The spirit of entrepreneurship has unleashed humans ability to defy the odds, and keep making continued progress. But yes, like anything in nature, humans ideas like capitalism and free market also need to continuously evolve.
And this is why I believe. The onus is now increasingly on the shareholders, promoters and business executives to voluntarily fully buy into the idea that, a business will need to learn to also prioritise the interest and well-being of the society, and not just the shareholders. Profit is good, but putting aside a part of that profit towards the greater good of the society is a smart long term investment, and it will provide dividend. Because quite frankly, without a society there will be no business or free market for that matter. A business that makes a genuine effort to be a strong partner of the society will reap huge rewards benefits over time, which will translate into greater gains for shareholders and sustainable profitability of the company.
From what I see, there is no perfect economic model, because the humans who conceive these ideas aren’t perfect. So there will always be a degree of imperfection and inherent flaws in whatever economic model we design for ourselves. And therefore a search for a perfect model of capitalism is probably a case of misdiagnosis. The design of our current economic system is such at its heavily biased towards capturing growth. Now for clarification purposes, we referring to growth created directly and indirectly created by human economic activities. But for some reason, we fail to factor in or capture the economic output of a parent from raising a good child. A child who may grow up to found the next few hundreds billions dollar business, or a child who could find a way to cure cancer and other such illnesses, or help the society explore the universe and in doing so create enormous wealth. So in my view, conceiving a better model will require us to address other related issues also. And one of them is obviously education.
I always wondered if , there is a need for us to address shortfalls in how we raise and educate our society. We do need to ask ourselves, are we wrongly educating the next generation? Not only because of there is a lack of skills in the economy that is getting increasingly more complex. I feel we should also look at addressing a bigger problem. For example, we teach children various subjects in school with an aim that, it allows them to move on to higher education, and then earn for themselves certification and validation of their knowledge through a university run degree program. Which is generally a prerequisite for earning a good salary, and therefore a must. Although things are changing somewhat, but in overall terms that’s how we have conceived our education system.
A system of followers, because without followers our ideas don’t work, do they ? Imagine a religion without followers or a social media influencer without a large follower-ship ? Or an economic model that people aren’t buying into ? So if I had a say, I would encourage the schools to start helping children learn, how to better use their minds. And that would involve learning to train a mind as a part of the regular curriculum. It is one of the most important skill a human needs to learn. And if you do manage to get a good handle on how to use your mind and also to understand what is your mind then, living a human life becomes much easier. You not only get better at relationships, but also your understanding of your self and the world at large, giving you more confidence. Also managing your journey in life gets easier, because you learn to make better and right decisions, and also get much better at learning. My sense is, we will then be able to create a much better society. And that’s why I believe, conceiving an update for capitalism will also require us to make changes in how we raise and educate our society, or else we will continue to misdiagnose the problems facing the society.
For me at least, it is not about capitalism versus socialism, or elite liberalism versus neo conservatism, that’s not my fight, because both the ideas fail to fully capture the underlying issues and changes within the global society. Eventually, we will need to arrive at a new normal, whatever that new normal will be, knowing well that this new normal won’t be a permanent status quo either, and the flow of the winds will change again, causing disruption. And humans will continue to play their role in being part of the problem. So the super organism will continue to look for a new normal.