Capitalism and Socialism: a reflection

I can see the warning signs as I prepare myself to write about this. It is, in every way, a complicated topic. However, I would like for you to indulge me, it is nothing more but a short reflection. I will start by saying I have no political ambitions, I am a journalist and my purpose is to be a watchdog for those that do. I would also add that I tend to vote more on the right than on the left but I would say I am right there in the middle. Allow me to explain. I believe in market solutions, in private initiative and in a small State apparatus. However, by small I don’t mean non-existent. I believe the State must protect the weakest and most vulnerable and provide for good education, health and social security. All in all, I believe in balance. Having said that, I believe no such system exists.

We all know about the dangers of socialism and its extremes as we have seen with some communist countries, mainly USSR. It seems obvious that it is impossible for everyone to aspire to the same thing, to be awarded the same wage, regardless of merit. Competition is in itself an incentive for excellence and if there is no visible difference in rewards between a dedicated worker and a lazy one, competition is impossible. Also, in a non competitive environment even the most brilliant minds tend to wane. Successful people would feel the disincentive and the results would be ever decreasing productivity. Adding to that, you can be sure to have some environments that are more equal than the others. Despite its negative side, Socialism did have a social consideration embedded in it, an ideal worth preserving.

Capitalism sits on the other side of the fence. It allows one to take the initiative, a fight for new ideas that can have a real impact in our world. It inspires competitiveness, creativity and, hence, excellence. Economic relations are formed and expanded and a stability is welcomed by the system. It is however an unbalanced system and the disparities are huge. As the international organization Oxfam mentions in a new report, the 85 richest people in the world have the same amount of wealth as the 3.5 billion poorest. I cannot begin to comprehend how this is possible, let alone just, or right. As I mentioned above, I believe in a system that rewards merit, where I would include hard work, inventiveness and entrepreneurship. However, it is impossible to believe that 85 people work harder, are more creative, inventive or entrepreneurial than 3.5 billion people. Even if we exclude the 200 million unemployed worldwide, it still seems ridiculously unfair. This level of inequality is visible at a smaller scale as well, when you witness a growth in the wealthiest fortunes, even if their countries are struggling, a practice that has become common not only in developing countries but in western society as well.

Oxfam’s report states that the wealthiest bend the laws in their favor, guaranteeing that wealth continues to be funnelled to the upper echelons of society. We see them investing in political campaigns, huge lobbying firms, lawyers that help them find loopholes in the law and there is always the good old bribe. There are many examples on Forbes top 10, let alone in the top 85, of billionaires with strong political connections that help them maintain their wealth. They use money to buy support, to make sure their interests are in good hands, to make sure they make more money. It is an endless circle, almost of a feudal nature, with and increasing disparity between the richest and the poorest.

Thus, the current system perverts the very essence of democracy, and the consequences are more than just the concentration of wealth on the upper 1%, as the Occupy movement labelled them. As we’ve been witnessing in the last few decades, the oil lobby has managed to keep alternative power sources that can be as or more efficient from being fully adopted (hydrogen, for example), even if some countries seem to be making real progress. Oil companies and their shareholders need to keep their incomes so they prefer if life altering research is kept hidden or just is not investigated any further. They do so through lobbying groups, campaign donations and all the other mechanisms mentioned above. The point is, it is not just about money any more.

The point I am trying to make is that, even though communism was an ineffective economical system, capitalism seems to be showing some of its flaws as well. Just as we realized socialism was not the best way to move forward, I believe we will soon realize capitalism is not the solution either. At least as it is right now, with disregard for communal interests, a lack of a social conscience and lawless markets. A mix between the two ideals may be the answer, I honestly do not know. However, I do know that, as we are today, we are at risk of falling prey to populist rhetoric, anarchy and we endanger our future.


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