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Political philosophies
1.0 Introduction
Governments are needed to govern a human society that otherwise would degenerate into chaos. A political system is defined as the set of formal legal institutions that constitute a "government" or a "state." More broadly the term comprehends actual as well as prescribed forms of political behaviour, not only the legal organization of the state but also the reality of how the state functions. The political system is also seen as a set of "processes of interaction" or as a subsystem of the social system interacting with other non-political subsystems, such as the economic system. This points to the importance of informal socio-political processes and emphasizes the study of political development.
Various states and governments obviously exist around the world. In this context, “state” means the political unit within which power and authority reside. This unit can be a whole nation or a subdivision within a nation. Thus the nations of the world are sometimes referred to as states (or nation-states), as are subdivisions within a nation, such as California, New York, and Texas in the United States. Government means the group of persons who direct the political affairs of a state, but it can also mean the type of rule by which a state is run. Another term for this second meaning of government is political system, which we will use here along with government. The type of government under which people live has fundamental implications for their freedom, their welfare, and even their lives.
2.0 Authoritarianism and Totalitarianism
Authoritarianism and Totalitarianism are general terms for non-democratic political systems ruled by an individual or a group of individuals who are not freely elected by their populations and who often exercise arbitrary power. To be more specific, authoritarianism refers to political systems in which an individual or a group of individuals holds power, restricts or prohibits popular participation in governance, and represses dissent. Totalitarianism refers to political systems that include all the features of authoritarianism but are even more repressive as they try to regulate and control all aspects of citizens' lives and fortunes. People can be imprisoned for deviating from acceptable practices or may even be killed if they dissent in the mildest of ways.
Compared to democracies and monarchies, authoritarian and totalitarian governments are more unstable politically. The major reason for this is that these governments enjoy no legitimate authority. Instead their power rests on fear and repression. The populations of these governments do not willingly lend their obedience to their leaders and realize that their leaders are treating them very poorly; for both these reasons, they are more likely than populations in democratic states to want to rebel. Sometimes they do rebel, and if the rebellion becomes sufficiently massive and widespread, a revolution occurs. In contrast, populations in democratic states usually perceive that they are treated more or less fairly and, further, that they can change things they do not like through the electoral process. Seeing no need for revolution, they do not revolt.
Since World War II, which helped make the United States an international power, the United States kept opposing some authoritarian and totalitarian regimes worlwide, while supporting some others. The Cold War pitted the US and its allies against the Communist nations, primarily the Soviet Union, China, Cuba, and North Korea. But while the US opposed these authoritarian governments, it supported many others, including those in Chile, Guatemala, and South Vietnam, that repressed and even murdered their own citizens who dared to engage in the kind of dissent constitutionally protected in the United States. Earlier in US history, the federal and state governments repressed dissent by passing legislation that prohibited criticism of World War I and then by imprisoning citizens who criticized that war. During the 1960s and 1970s, the FBI, the CIA, and other federal agencies spied on tens of thousands of citizens who engaged in dissent protected by the First Amendment. The United States’ role as a beacon of freedom and hope to much of the world's peoples has come into question due its own support for repression in the recent and more distant past and suggests that eternal vigilance is needed to ensure that "liberty and justice for all" is not just an empty slogan.
3.0 Monarchy
Monarchy is a political system in which power resides in a single family that rules from one generation to the next generation. The power the family enjoys is traditional authority, and many monarchs command respect because their subjects bestow this type of authority on them. Other monarchs, however, have ensured respect through arbitrary power and even terror. Royal families still rule today, but their power has declined from centuries ago. Today the Queen of England holds a largely ceremonial position, but her predecessors on the throne wielded much more power.
This example reflects a historical change in types of monarchies from absolute monarchies to constitutional monarchies. In absolute monarchies, the royal family claims a divine right to rule and exercises considerable power over their kingdom.
Absolute monarchies were common in both ancient (e.g., Egypt) and medieval times (e.g., England and China). In reality, the power of many absolute monarchs was not totally absolute, as kings and queens had to keep in mind the needs and desires of other powerful parties, including the clergy and nobility. Over time, absolute monarchies gave way to constitutional monarchies. In these monarchies, the royal family serves a symbolic and ceremonial role and enjoys little, if any, real power. Instead the executive and legislative branches of government-the prime minister and parliament in several nations-run the government, even if the royal family continues to command admiration and respect. Constitutional monarchies exist today in several nations, including Denmark, Great Britain, Norway, Spain, and Sweden.
4.0 Democracy
The type of government with which we are most familiar is democracy, or a political system in which citizens govern themselves either directly or indirectly. The term democracy comes from the Greeks and means “rule of the people”. In Lincoln's stirring words from the Gettysburg Address, democracy is “government of the people, by the people, for the people”. In direct (or pure) democracies, people make their own decisions about the policies and distribution of resources that affect them directly. However, except for some Scandinavian countries characterized by low population density, such direct democracies are impractical. Representative democracies are thus much more common. In these types of democracies, people elect officials to represent them in legislative votes on matters affecting the population.
Representative democracy is more practical than direct democracy in a society of any significant size, but political scientists cite another advantage of representative democracy. At least in theory, it ensures that the individuals who govern a society and in other ways help a society function, are the individuals who have the appropriate talents, skills, and knowledge to do so. In this way of thinking, the masses of people are, overall, too uninformed, too uneducated, and too uninterested to run a society themselves. Representative democracy thus allows for “the cream to rise to the top” so that the people who actually govern a society are the most qualified to perform this essential task. Although this argument has much merit, it is also true that many of the individuals who do get elected to office turn out to be ineffective and/or corrupt. Regardless of political orientations, Americans can think of many politicians to whom these labels apply, from presidents down to local officials.
The defining feature of representative democracy is voting in elections. The example of the American Revolution and the stirring words of its Declaration of Independence helped inspire the French Revolution of 1789 and other revolutions since, as people around the world have died in order to win the right to vote and to have political freedom.
Democracies are certainly not perfect. Their decision-making process can be quite slow and inefficient; as just mentioned, decisions may be made for special interests and not “for the people”; pervasive inequalities of social class, race and ethnicity, gender, and age can exist. Moreover, in not all democracies have all people enjoyed the right to vote.
In addition to generally enjoying the right to vote, people in democracies also have more freedom than those in other types of governments. The freest nations are found in North America, Western Europe, and certain other parts of the world, while some of the least free lie in Asia, the Middle East, and Africa.
5.0 SOCIALISM AND COMMUNISM
Socialism: Socialism arose as a response to the Industrial Revolution, which was the emergence of technologies such as the steam engine and mass production. The Industrial Revolution started in England in the last years of the eighteenth century and had spread to much of Europe and America by the end of the nineteenth century. It caused major upheavals: In a very short time, many people were forced to abandon agricultural ways of life for the modern mechanized world of factories. That uprooted families, communites and entire societies.
As a political movement, socialism includes a diverse array of political philosophies, ranging from reformism to revolutionary socialism. Proponents of state socialism advocate the nationalisation of the means of production, distribution and exchange as a strategy for implementing socialism. In contrast, libertarian socialism opposes the use of state power to achieve such an arrangement, opposing both parliamentary politics and state ownership. Democratic socialism seeks to establish socialism through democratic processes & propagate its ideals within a democratic political system.
Modern socialism originated from an 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private property on society. In the early 19th-century, "socialism" referred to any concern for the social problems of capitalism irrespective of the solutions to those problems. However, by the late 19th-century, "socialism" had come to signify opposition to capitalism and advocacy for an alternative system based on some form of social ownership. Marxists expanded further on this, attributing scientific assessment and democratic planning as critical elements of socialism.
Early versions of socialism were put forward in Europe in the first part of the nineteenth century (these versions are often dubbed "utopian socialism"), but truly influential socialist theories did not emerge until industrialization expanded in the mid-nineteenth century. Karl Heinrich Marx (1818 - 1883) - who was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist - is the best-known theorist of socialism, whose ideas led to the creation of a communist revolution in Russia in 1917. Along with Friedrich Engels, Marx wrote The Communist Manifesto (1848) as a call to revolution. Other prominent socialists thinkers included Karl Kautsky, Vladimir Lenin, and Antonio Gramsci.
Socialism emphasizes:
Collectivism: Human beings are social by nature, and society should respect this. Individualism is poisonous.
Public ownership: Society, not individuals, should own the property.
Central economic planning: The government plans the economy; there is no free market.
Economic equality: All citizens have roughly the same level of prosperity.
Class Warfare: According to socialists, liberalism fails to live up to its promises of freedom and equality. Socialists blame the free market for liberalism's failings. Under a capitalist system, money and means of production are the measures of power. The haves (the bourgeoisie, in Marx's terms) and the have-nots (whom Marx calls the proletariat) are locked into a fight that Marx called class warfare. Because they control the money and means of production, the bourgeoisie have the power and thus are winning the fight. The rich use the government to further their control and to increase their power over the lower, poorer classes, so people are neither free nor equal.
The evolution of socialism: Socialism evolved in a variety of ways. Communism and democratic socialism are the two most prominent evolutions of socialism.
Communism: An authoritarian and revolutionary approach to achieving socialism. It talks of “achieving a communist ideal NOW” rather than wait for a gradual evolution. As an ideology, communism emphasizes a classless society in which all members jointly share the means and output of production. The regimes of the Soviet Union and communist China embody this ideology. Communists such as Vladimir Lenin, who became the first premier of the Soviet Union post the communist revolution in 1917, argued that people can and must make the transition to socialism quickly rather than waiting for it to evolve. Authoritarian and violent measures are often required because the defenders of capitalism will fight ferociously to stop socialism from coming into being.
Principles of communism:
- The expropriation of landed property and the use of rent from land to cover state expenditure
- A high and progressively graded income-tax
- Abolition of the right of inheritance
- The confiscation of the property of all emigrants and rebels
- The centralization of credit in the hands of the state, by the establishment of a state bank with state capital and an exclusive monopoly
- The centralization of transport in the hands of the state
- An increase in the state ownership of factories and instruments of production, and the redistribution and amelioration of agricultural land on a general plan
- Universal obligation to work and creation of labour armies especially for agriculture
- The unification of agricultural with industrial labour, and the gradual abolition of the differences between town and country
- The public education of all children. Abolition of factory labour for children in its present form. Unification of education with economic production.
Democratic socialism: Democratic socialism is a peaceful and democratic approach to achieving socialism. As an ideology, democratic socialism also emphasizes a classless society in which all members jointly share the means and output of production. But unlike communism, democratic socialism attempts to achieve its goals peacefully via the democratic processes. Democratic socialists reject the need for immediate transition to socialism in favor of a gradualist approach, achieved by working within a democratic government. Economic inequalities should be remedied through a welfare state, a system that provides aid to the poor and help to the unemployed.
Democratic socialism today: Democratic socialism has been quite successful in Western Europe and Scandinavia. Many governments there have extensive welfare systems that have remained largely intact even when democratic socialists are voted out of office. Democratic socialist parties exist in many democracies around the world. Germany's Social Democratic Party and Britain's Labor Party are contemporary examples of successful political parties heavily influenced by democratic socialism. In India, however there was a lot of debate on socialism as an economic model and as a guiding principle of the nation as enshrined in the preamble to the Constitution. Though India is still a welfare state (the basic objective of socialism), the economic model has veered towards capitalism in the past 20 years. This is as true about India as it is about a host of other countries.
6.0 CAPITALISM
Adam Smith is considered the first theorist of what we commonly refer to as capitalism. His 1776 work, An Inquiry into the Nature and Causes of the Wealth of Nations, put forth the theory that within a given stable system of commerce and evaluation, individuals would respond to the incentive of earning more by specializing their production. These individuals would naturally, without specific state intervention, "direct ... that industry in such a manner as its produce may be of the greatest value." This would enable the whole economy to become more productive, and it would therefore be wealthier.
Smith argued that protecting particular producers would lead to inefficient production, and that a national hoarding of specie (i.e. cash in the form of coinage) would only increase prices, in an argument similar to that advanced by David Hume. His systematic treatment of how the exchange of goods, or a market, would create incentives to act in the general interest, became the basis of what was then called political economy and later economics. It was also the basis for a theory of law and government that gradually superseded the mercantilist regime then prevalent.
Smith asserts that when individuals make a trade they value what they are purchasing more than they value what they are giving in exchange for a commodity. If this were not the case, then they would not make the trade but retain ownership of the more valuable commodity. This notion underlies the concept of mutually-beneficial trade where it is held that both sides tend to benefit by an exchange.
Although he is often described as the "father of capitalism" (and the "father of economics"), Adam Smith himself never used the term "capitalism". He described his own preferred economic system as "the system of natural liberty". However, Smith defined "capital" as stock, and "profit" as the just expectation of retaining the revenue from improvements made to that stock. Smith also viewed capital improvement as being the proper central aim of the economic and political system.
The word capitalism is now quite commonly used to describe the social system in which most of the world now lives. It is also often assumed that it has existed, if not forever, then for most of human history. In fact, capitalism is a relatively new social system. The following are some of the features of capitalism:
Class division: Capitalism is the social system which now exists in all countries of the world. Under this system, the means for producing and distributing goods (the land, factories, technology, transport system etc.) are owned by a small minority of people. This group of people is referred to as the capitalist class. The majority of people must sell their ability to work in return for a wage or salary (who we refer to as the working class.)
The working class are paid to produce goods and services which are then sold for a profit. The profit is gained by the capitalist class because they can make more money selling what the working class has produced than it (the working class) cost to buy on the labour market. In this sense, the working class are exploited by the capitalist class (a hugely subjective argument). The capitalists live off the profits they obtain from exploiting the working class whilst reinvesting some of their profits for the further accumulation of wealth. When nations own companies that are profit-making, this debate rages wild - what to do with profits of the PSUs (or SOEs)? Pay 100% as dividents to the owner government, or reinvest a part of the profits for future growth?
This is what is meant when theorists say that there are two classes in society. It is a claim based upon simple facts about the society people live in today. This class division is the essential feature of capitalism. It may not be exactly clear which class some relatively wealthy people are in. But there is no ambiguity about the status of the vast majority of the world's population. Members of the capitalist class certainly know who they are. And most members of the working class know that they need to work for a wage or salary in order to earn a living (or are dependent upon somebody who does, or depend on state benefits).
The profit motive: In capitalism, the primary motive for producing goods and services is to sell them for a profit, not to satisfy people's needs. (It is clear, although, that unless you satisfy your consumer’s needs, why would they buy from you.) The products of capitalist production have to find a buyer, of course, but this is only incidental to the main aim of making a profit, of ending up with more money than was originally invested. Many extreme thinkers speculate that production is started not by what consumers are prepared to pay for to satisfy their needs but by what the capitalists calculate can be sold at a profit. Those goods may satisfy human needs but those needs will not be met if people do not have sufficient money.
The profit motive is not just the result of greed on behalf of individual capitalists. They do not have a choice about it. The need to make a profit is imposed on capitalists as a condition for not losing their investments and their position as capitalists. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to keep their means and methods of production up to date.
So, it seems that it’s the class division and profit motive of capitalism that is at the root of most of the world's problems today, from starvation to war, to alienation and crime. Every aspect of modern citizens’ lives is subordinated to the worst excesses of the drive to make profit. In capitalist society, our real needs will only ever come a poor second to the requirements of profit.
Capitalism and a free market: It is widely assumed that capitalism means a free market economy. But it is possible to have capitalism without a free market. The systems that existed in the U.S.S.R and exist in China and Cuba demonstrate this. These class-divided societies are widely called 'socialist'. A cursory glance at what in fact existed there reveals that these countries were simply 'state capitalist'. In supposedly 'socialist' Russia, for example, there still existed wage slavery, commodity production, buying, selling and exchange, with production only taking place when it was viable to do so. 'Socialist' Russia continued to trade according to the rules of international capital and, like every other capitalist state, was prepared to go to war to defend its economic interests. The role of the Soviet state became simply to act as the functionary of capital in the exploitation of wage labour, setting targets for production and largely controlling what could or could not be produced. This is a huge irony! Lenin (looking down upon Earth with dismay from the heavens) therefore would feel justified in asserting that such countries had nothing to do with socialism as he (and Marx) defined it. In fact, socialism could not exist in one country alone - like capitalism it must be a global system of society.
It is also possible (at least in theory) to have a free market economy that is not capitalist. Such a 'market economy' would involve farmers, artisans and shopkeepers each producing a particular product that they would exchange via the medium of money. There would be no profit-making and no class division - just independent producers exchanging goods for their mutual benefit. But it is doubtful whether such an economy has ever existed. The nearest that may have come to it would have been in some of the early colonial settlements in North America. Some environmentalists wish to see a return to this kind of economy. We do not think that it is a viable alternative for modern society. Such a system would almost inevitability lead to capital accumulation and profit making - the definitive features of capitalism.
The invisible hand: The idea of an “invisible hand” was introduced by Adam Smith in his book The Wealth of Nations first published in 1776. Smith uses this concept to describe a paradox of laissez-faire or perfect competition, in which every person in an economy working to achieve his own selfish goals leads to benefit of all. The individual neither intends to promote the public nor he knows how much he is promoting it. Adam Smith compares this process as an invisible benevolent directing the whole process for benefit of all.
Based on belief of effectiveness of this so called invisible hand, the doctrine of laissez-faire which recommends that government should interfere as little as possible in economic affairs, guided the action of governments in many countries. However, beginning from the twentieth century, there has been a growing feeling that the theoretical assumption on which the action of invisible hand is dependent, does not exist in reality.
Smith developed his theories assuming a heavily planned and rather dictatorial society, where some individuals were above the law and others were effectively without any rights. In a centralised society a few individuals make decisions on how to spend everyone's money and direct everyone's effort.
Nowadays, “invisible hand” explanations are invoked to explain all sorts of phenomena, from scientific progress to environmental degradation. In the modern context, mathematicians study “invisible hand” processes as part of the Game Theory, the branch of mathematics that deals with payoffs and strategies.
7.0 THE FALL OF COMMUNISM
The internal challenges to communism: The Soviet bureaucracy and the secret sevices mainly robbed all personal freedom reducing citizens to give up their basic rights including the right to live in some cases, in the name of the Communist State. The notorious secret police apparatus of NKVD under Lavrentiy Pavlovich Beriya (reporting to Joseph Stalin) ensured large scale executions of dissenters (he was himself executed in 1953). A relatively young Mikhail Gorbachev, who assumed power in 1985 at the age of 54, was sensitive & perceptive enough to see it. He remembered his role in restoring the citizens’ rights. He found that the State has been intimidating about the external threat to the Communist State. He was convinced of the futility of the Superpower stand-off & the endless ego involvement. He saw that after 1945, there was no threat from each other except the posturing. So he took the initiative to call it ‘quits’. It might appear that he conceded defeat, but he was also convinced of its long-term effects on USA.
The external challenges to communism: The turn-back in Afghanistan in 1988 was a big setback. Every wise person who ever read Afghan history was alive to the fact that Afghanistan (after Alexander/Seleucus' time) was never subdued.
The reasons for the collapse of communism: The superpower stand-off was a losing game, if the initial humongous successes in developing the Soviet Union (through the 1920s and 30s) was quite an achievement. Yet, the Communist State structure couldn't provide many consumer necessities (goods & services) in spite of waiting for three generations after WW II. This bred serious public discontent. How long could people stand in endless queues to collect their daily bread!
The process of collapse of communism: It started with the Afghanistan fiasco. The Soviet army faced a defeat, when the Afghanis' religious sensitivities were provoked & their determination to save the religion from a perceived danger. Soviet State undermined religion & succeeded in reducing it a secondary issue in Statecraft - quite an achievement & perhaps desirable too - but the State stood derobed now. Gorbachev’s well-intentioned programmes of glasnost (political openness) and perestroika (political and economic restructuring) started in 1986 but only served to accelerate the end of the USSR in 1991.
In the 'brand' war of Communism & Capitalism, the latter won. So, the Soviet populace was frustrated. There was the German fervour for reunification that was legitimate (not to be mistaken for the limited resurgence of Nazism). Capitalist world was at its pinnacle of prosperity beckoning the Communist Second world to join in, confronting which the Soviet State felt powerless.
The effects of the collapse of communism on various nations:
The USSR: The 15 republics broke up into fully sovereign States, having voted out of Communism that was binding the Union.
Eastern Europe: The process of voting out the 'Communist State' by dissolving the 'Party' started first in the 6 East Europe satellites of East Germany, Poland, Czechoslovakia, Hungary, Romania & Bulgaria.
The West: There was euphoria in the West for winning the Cold War. The people felt vindicated about their Capitalist stand.
China: The Communist doctrine in China was always at variance with the classical version in USSR. It was violence prone as Mao believed that power flowed through the barrel of the gun. This idea spread like virus in many non-communist countries in third world. In China, communism (the 'State' before the individual) was identified with the totalitarian principle. Deng Xiao Ping - who came to power in 1979 - clarified that what was needed in China was state authority, In his words “it is not important if the cat is black or white as long as it catches mice”. He subtly revised Mao's power dictum. His aim was to make China the most dominant country, industrial and otherwise. The release from Communism (not apparent) gave it an unabashed Capitalist lead in its race, with State control coming handy in suppressing undesirable democratic dissent.
Communism is at once a complete system of proletarian ideology and a new social system. It is different from any other ideological and social system, and is the most complete, progressive, revolutionary and rational system in human history. The ideological and social system of feudalism has a place only in the museum of history. The ideological and social system of capitalism has also become a museum piece in one part of the world (in the Soviet Union), while in other countries it resembles "a dying person who is sinking fast, like the sun setting beyond the western hills", and will soon be relegated to the museum. The communist ideological and social system alone is full of youth and vitality, sweeping the world with the momentum of an avalanche and the force of a thunderbolt.
Mao Tse Tung
The founder of PRC in 1949
The future of communism: With the fall of communist regimes in Russia and Eastern Europe, communism remained in retreat for most of the 1990s and 2000s. There are, for example, fewer communist movements around the world than during the Cold War. But there are still several major communist regimes, including the governments of North Korea and Cuba. They are quite solid and unshakeable, as of now.
Despite the difficulties and dislocations wrought by the transition to a capitalist market economy, Russia and the former Soviet republics are unlikely to re-establish communist rule. The Communist Party of the Russian Federation, the successor of the CPSU, attracts some followers, but its ideology is reformist rather than revolutionary; its chief aim appears to be that of smoothing the continuing and sometimes painful transition to a market economy and trying to mitigate its more blatantly inegalitarian aspects. In China, Maoism is given lip service but no longer is put into practice. Many large industries are still state-owned, but the trend is clearly toward increasing privatization and a decentralized market economy. China is now on the verge of having a full-fledged capitalist economy. This raises the question of whether free markets and democracy can be decoupled, or whether one implies the other. The CPC (Communist Party of China) still brooks no opposition, as the suppression of pro-democracy student demonstrations in Tiananmen Square in 1989 made clear. But the views of the present new generation of leaders - President Xi Jinping and Premier Li Keqiang - are only now becoming known to the world at large. The Party’s third plenum in Nov 2013 points to a land reforms and one-child-policy reform, which is an indicator that the leadership wants to move forward with a progressive mindset.
Mao's version of Marxism-Leninism remains an active but ambiguous force elsewhere in Asia, most notably in Nepal. After a decade of armed struggle, Maoist insurgents there agreed in 2006 to lay down their arms and participate in national elections to choose an assembly to rewrite the Nepalese constitution. Claiming a commitment to multiparty democracy and a mixed economy, the Maoists emerged from the elections in 2008 as the largest party in the assembly - a party that now appears to resemble the pragmatic CPC of recent years more closely than it resembles Maoist revolutionaries of the 20th century.
Meanwhile, North Korea, the last bastion of old Soviet-style communism, is an isolated and repressive regime. Long deprived of Soviet sponsorship and subsidies, Cuba and Vietnam have been reaching out diplomatically and seeking foreign investment in their increasingly market-oriented economies, but politically both remain single-party communist states.
Today Soviet-style communism, with its command economy and top-down bureaucratic planning, is defunct. Whether that kind of regime was ever consistent with Marx's conception of communism is doubtful; whether anyone will lead a new movement to build a communist society on Marxist lines remains to be seen.
8.0 THE CRISIS IN CAPITALISM
Karl Marx saw every major depression in the nineteenth century as the final crisis of capitalism, due to its " internal contradictions", that would usher in the era of socialism and communism. Unfortunately for Marx, each time he was proved wrong because the end of these depressions was often followed by an even stronger capitalist surge.
Something similar has taken place during the past few major world financial crises. The Asian crisis led to a book in 1998 by the eminent financier George Soros called "The Crisis of Global Capitalism", although eventually he retracted his forecast that this was the major crisis of capitalism. The collapse of Lehman Brothers and the resulting financial crisis and Great Recession created a robust market for the collapse of capitalism forecasters. Many feared that the modern capitalist model was about to collapse.
In 2009 the Financial Times commissioned a series of articles with very different viewpoints, most pessimistic, on the future of capitalism in the wake of the financial crisis. An attempt was made to "…devise reforms that aim to reduce the likelihood of future severe contractions, the accomplishments of capitalism should be appreciated. Governments should not so hamper markets that they are prevented from bringing rapid growth to the poor economies of Africa, Asia and elsewhere that have had limited participation in the global economy".
"The Great Depression of 1929 induced a massive worldwide retreat from capitalism, and an embrace of socialism and communism that continued into the 1960s. It also fostered a belief that the future lay in government management of the economy, not in freer markets. The result was generally slow growth during those decades in most of the undeveloped world, including China, the Soviet bloc nations, India and Africa."
In face of the European debt crisis and the US economy tilting more and more towards socialistic practices, it is unclear as to which philosophy will emerge ultimately as the winner.
Ironically, outside US and Europe capitalism is more prominent than ever. Country after country is reducing the scale of its public enterprises and expanding the scope of the private sector. For the first time in almost 70 years, Mexico has opened it oil and other energy sectors to greater participation by private firms. The new leaders of China have expressed dissatisfaction with the performance of public enterprises, and have called for greater participation by private firms in many sectors, including financial markets. India is going ahead with the reforms process in spite of political disagreements and are privatizing their pension funds also.
The formerly mainly socialist government of the very poor nation Rwanda has been encouraging private companies to increase its role in the limited landlocked Rwanda economy. India is trying to reduce its many labor market and other regulations so that direct foreign investments will increase in India, and its own private firms will expand their activities. On the other side of the ledger, nations like Venezuela that has conducted a war on the private sector has seen poverty grow and its economy stagnate.
The reason behind these pro-capitalist activities is that more and more countries have realized that despite is many flaws, capitalism - like democracy - is the only system yet devised that brings hope of lifting the masses out of poverty and creating a robust middle class. Most people realize this, and have prevented political leaders from using the reaction against capitalism brought on by the financial crisis to try to radically transform a system that has brought so much wealth and health to the peoples of the world.
"The impulse to acquisition, pursuit of gain, of money, of the greatest possible amount of money, has in itself nothing to do with capitalism. This impulse exists and has existed among waiters, physicians, coachmen, artists, prostitutes, dishonest officials, soldiers, nobles, crusaders, gamblers, and beggars. One may say that it has been common to all sorts and conditions of men at all times and in all countries of the earth, wherever the objective possibility of it is or has been given. It should be taught in the kindergarten of cultural history that this naïve idea of capitalism must be given up once and for all."
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