Capitalism Is a Force for Social Progress - Essay Example

Capitalism Introduction Capitalism is a system of economics that is based on the individualor private ownership of production inputs and capital, and on the production of services and goods for profit. The production of services and goods is based on the demand and supply in the market rather than central planning (Fulcher & James, 2004). It is usually characterized by capital accumulation and the competition among the producers. The owners who are not laborers in the firm, the objective of work to profit the owners and the social classes or hierarchies that are produced by these economic relations may also define capitalism as a social system that is characterized by the control of the workplaces. Social progress refers to improvement of the societies’ economic, social, and political structures. This can happen because of human action through social activism or as a social enterprise or as a natural part of the sociocultural evolution. Improvement in the living standards, industrialization, technological advancements are among the components of social progress. Discussion Developed countries have become richer as the years go by. Unfortunately, the social progress, which has always been the objective of social thinkers since 19th and 20th century, has eluded. The social bargain that the employees and the members of their families enjoyed the prosperity through their commitment to economic growth at mid-century has not been maintained. In America, for instance, the top 5% gain over 21% of the household income, while the bottom 5 received below 4% between them. In Britain, the difference between the rich and the poor has been greater since 19th century. The middle class families with the dream of achieving a stable career option have been directly affected by job insecurity. Similarly, the price of failure has been on the rising trend. Since 1970, the high school graduands are the first to experience low standard of living that the welfare provision for the unemployed have been stripped away. If the prospects of property are not brought by economic growth, the material pathway to human happiness rings hollow in the uncertainty face. There is only a smaller proportion of the society that can insulate themselves from the risk that affects other members of the society. This is not similar to majority of individual that operate within the middle wage bracket. The group stands to earn more so that they can cushion themselves from the increasing trend of survival cost. According to Friedrich Hegel, the strengths that strengthen the great nations in the entire history have become one of their obsessions that undermine them. In Britain and US, the economic, social, and personal transformation brought back the western capitalism. The New Rights syndrome has led to searching alternative ways between the free market and the command economy. The social progress and capitalism will argue that the most appropriate way that leads to a social democratic future needs to be developed by challenging the intelligence and the market individualism. The intelligence emphasis highlights the notion that in an economic perspective of person at work, school, and home is dependent on their multiple abilities such as emotions. Whereas the collective focus is meant in challenging the obsession with personal competition. The purpose is endorsing the cooperation spirit as a freedom, social justice, and prosperity condition in 21st century. The freedom of an individual is dependent on the balance between cooperation and competition, market and state, responsibilities and rights. Subsequently, the difference between productive paid work and unproductive unpaid work is always assumed to be anachronism. In recent years, the difference has always remained to be plausible provided a few are required to exercise intelligence and that formal learning is always considered to be complete at early stages. The collective intelligence will soon become the final economic source of security in global economies. However, the intelligence pooling is impossible to attain in societies that are characterized by economic insecurity, low trust, and social polarization. This has always been the conditions that have failed to foster the process of learning. In 1979, the American people were advised not to expect improvements in their living standards. The American ruling class strategically started a campaign as a moral crusade, which was a battle against the people whom they termed as becoming too complacent and too ready in expecting that life would keep on getting better (Harvey & David, 2005). This gesture by the elite was projected as the war against the laziness and laxity of some people. Reduced wages and social program cuts were termed as efforts crucial in bringing back the god work ethic that was the key to the earlier prosperity. Working people would thus be reminded and taught that poverty is the price to pay for those who do not work hard. These were the days of neoberalism, a turn to a form of capitalism that resulted to a new wave of expansion characterized by a growth pattern that was based on the rising global poverty, increased human insecurity and social inequality (Harvey & David, 2005). There is a general argument that for a quarter century the western capitalism did undergo a great boom but only to fall to a depression that it has not yet fully recovered from. Though it is true that capitalism underwent a deep slump in the 1970s, its recovery began in the early 1980s. Capitalism however did not achieve the growth rate characteristics of the great boom that had followed the World War II although China achieved and exceeded those rates. For about twenty-five years after the depression, profits had a rising trend and the system sustained a wave of expansion that saw the world’s economy triple in size (McNally & David, 2010). It also saw the dramatic growth of the working class. After the World War II, the capitalist nations grew three times faster than in the interwar years and more than twice as fast as before the World War I. in the course of about twenty-five years, output of the capitalistically developed nations such as Japan and Europe tripled. In some parts of capitalist core, the growth rates were first driven by the bounce-back from the wartime but even with this being factored in, sustained expansion character was attributed to capitalism that had resulted to great jumps in the world trade. A striking change however was the gradual and consistent rise in the workers’ living standards in the capitalist nations (Potter & Robert, 2008). Year after year the incomes rose and millions of the fully employed workers in the North were able to afford and buy cars among other luxuries. The improved living standards were as a result of the increases in the worker productivity. For instance, between the early 1950s and the early 1970s, output per worker doubled as the result of technological advancement such as new machines and technological innovations. The employers could thus raise enjoy rising profits and still raise the wages as long as the wage improvements lagged behind the productivity increase. This led to a huge increase in the size of the working class that ensured employers had large pools of people desperate for employment. With the millions of European and Japanese farmers migrating from the countryside to work in the capitalist core, organizations, corporations, and institutions enjoyed a steady growth of the labor force (Maddison & Angus, 2002). It also saw the entry of women into the labor markets. A pattern of over accumulation and declining profitability was seen during the unwinding of the great boom. The reasons for the fall of the world profit were attributed to work. There is a contradiction in the capital’s need to mechanize so as to win the battle of competition by speeding up the labor though mechanization usually tends to make investments more reliant on equipment and machines and correspondingly decreased labor intensive. This investment was heavily biased toward machinery and it led to the increase in the mass production per worker. However, it was not only the mass of machinery per employee that rose. Additionally, technological basis of industries was revolutionized with new innovations, new production processes, and new generations of machines coming on stream leading to the increased leaps in productivity of labor (Guimares & Joo, 2012). While the profitability was reducing, over-accumulation increased in the form of over-investment. This led to the buildup of new machines, factories, buildings among others. As the competition for profits and sales intensified, firms were forced to build up new capacity at a rapid pace. The processes were more rapid in Western Europe, South Korea and Japan where industries and factories were built virtually overnight. For instance, Japanese firms introduced the newest technologies thus emerging as the cutting-edge producers. Japanese firms established themselves as the world leaders through a wave of technological advancement and innovation (Dicken & Peter, 2010). This helped in ensuring the economic growth of Japan. Industrialization led to a huge increase taken together wealth (Wade, 2009. Technological improvements led to the increase in the quality of life. This was as a result of the improvements in the health and nutritional status. However, the social structure of capitalism did not ensure equal growth and advancement in the different social classes (Cammack, 2009). Although it led to overall increase in benefits, there was evidence of unequal benefits. For instance, data on the life expectancy in Britain revealed that although the life expectancy of lower classes increased or remained constant in some localities, life expectancy in upper class increased sharply (Hurrell & Andrew, 2007). However, the general increase in the quality of life as a result of industrialization shows that capitalism is indeed a force of social progress. Conclusion Capitalism is a system in economics based on the private or individual ownership of the production inputs and capital, and on the production of services and goods at a profit. It is characterized by capital accumulation, competition among the producers and the unfair distribution of wealth. Social progress on the other hand is the improvement of the societies’ economic, social, and political structures. Capitalism is seen as a process of continued change in which its need for new markets and higher profits has greatly influenced the economic and social development in various nations. Capitalism is a force for social progress in that people tend to fill the gap left by the unfair or unequal distribution of wealth. The need for individuals to depend on their own effort is a major contribution to the societies’ social progress. References Cammack, P. 2009, Why are Some People Better Off than Others?, in Edkins, J. and Zehfuss, M. (Eds.), Global Politics: A New Introduction. London: Routledge. Dicken & Peter, 2010, Global Shift (6th Edition), London: Sage. Fulcher & James, 2004, Capitalism: A Very Short Introduction, Oxford: Oxford University Press. Guimares & Joo, 2012, The High Cost of Inequality in Rich Countries, Development and Change. Harvey & David, 2005, A Brief History of Neoliberalism, Oxford: Oxford University Press. Hurrell & Andrew, 2007, On Global Order: Power, values, and the constitution of international society, Oxford: Oxford University Press Maddison & Angus, 2002, The West and the Rest, OECD Observer pp 47-52 McNally & David, 2010, Global Slump - The Economics and Politics of Crisis and Resistance. London: PM Press. Potter & Robert B., 2008, Global convergence, divergence and development, in Vandana Desai and Robert B Potter (eds.), The Companion to Development Studies, London: Hodder. Wade, R. H., 2009, Is Globalization Reducing Poverty and Inequality, in Chari, S. and Cordbridge, S. (Eds.), The Development Reader. London: Routledge. Read More