Global Wealth and Poverty Linked to the Capitalist World System - Essay Example

Introduction The word capitalism has always been treated with caution by people, especially those of the third world counties and those that follow socialist policies. It is mostly seen as a tool that could further imperialist hegemony over smaller nations who were dependent on more powerful nations for their sustenance. Capitalism was always considered as an evil by many smaller nations who equated it with a global conspiracy to rob them of their autonomy. The impact of capitalism on the world is profound and the tussle between capitalists and socialists seem to be a b\never ending political squabble. The impact of capitalism on the society is phenomenal. Today everybody talks about the global village and nations on either side of the globe are just hours away from each other. Cities are expanding by the hour and the new technologies that are impacting us are creating a unified world culture; what many would like to call as the brave new world. In retrospect, is this new culture based on bravery or untamed consumerism? World cultures are being annihilated by the wave of crass consumerism and scant regard for values. The populations of today have lesser family values and more internal strife, which threatens to tear apart social order. Violence due to the lack of family and supportive values are reducing a whole generation to waste. Societies who live under the minimum poverty standards complain of raw deals that has often been meted out to them by the supporters of globalization, which has become another name for extended business. 1 The effects of capitalism can be easily seen from the effect that it impinges on the culture and environment of a nation. It has been a long time since scientists have been thinking about how long and how far will we be able to push forward due to our unsatiated need for more land and resources. In fact, this is a global phenomenon and whatever natural resources that remain in the underdeveloped countries are being exploited for commercial reasons with scant regard for the environment. The backlash has already started and everyday we are greeted with news of natural disasters which leads to innumerable deaths: a system by which nature is trying to maintain balance in the world population. We often see that the much promised redemption of the poor from their wretched state as a result of globalization is a sad dream, which never get s fulfilled. On the other hand the natural resources of a place is often looted and sold for higher prices in the international markets. As long as globalization is spurred by market forces, it can only harm the countries on which major nations build their vast business empires. The state of the economy is examined rather critically in the paper titled ‘Making ends meet’ by Kathryn Edin and Laura Lein. The authors examine the life of the people who live with the welfare that is provided to them by the government. These people who live with a pittance doled out by the government typically live in the fringes of the city and struggle to make both ends meet. The authors feel that the life of these people, especially the single mothers, is determined by many different factors. They need to live and care for their kids with the narrow budget that they have and also have to find money to spend for themselves and their personal needs. The article highlights the fact that money is the most important aspect in everyone’s life and that people consider money as more important than personal relations. The state which seems to be doing a yeomen service by providing welfare money actually is hiding from taking a major responsibility because it considers that money alone can uplift or support the families. The state does not seem to have any responsibility to look after a potential citizen. This is one of the main issue that has been treated in the communist manifesto by Carl Marx and Frederick Angels who argued that the state must involve itself in the lives of the citizen and must ensure that the facilities of the state are available to one and all, not just the lucky ones who have better resources at their disposal. According to the communist manifesto, capitalism reduces people into money making machines whose worth is lost once they cannot make anymore money. The ideal capitalist philosophy assumes that every player is equal in capabilities and that every player would have equal opportunities. However, in practice, it is seen that this is rarely the case and that the system will be hijacked by the more powerful players who then will be able to drive it according to their needs. Many staunch supporters of pure capitalism believe that free market capitalism and independence are interchangeable concepts. 2 Robin Hahnels book "Panic Rules" is in fact a treatment of capitalistic institutions and the behaviour of the investor who is in constant search of an economic mirage that would offer him security and high returns at the same time. It may be observed that security and financial returns are almost mutually exclusive entities that refuse to stay together. If an investor has to make money, he needs to take some risks, which could also prove to be his undoing. One of the many important themes in his book is the behaviour of the investor that the author has put down in very interesting words. "Among economic systems, capitalism is the manic-depressive patient. Exuberance, unbridled optimism, and euphoria are followed by gloom, listlessness, and depression. But no matter how often the cycle is repeated the patient always believes the latest boom will last forever, only to feel foolish again when the bubble bursts." 3 However it will not be right to attribute all wrongs to capitalism. Many people believe that the social market economy, by being the middle road approach between pure capitalism and socialism, has equal room for ensuring social justice and a vibrant economy. It allows growth in all dimensions and due to the inherent protectionist provisions, assures that small businesses are not destroyed in the process. 4 Many social market economies exist in the world and most of them are having a good record of accomplishments in the economic front. For example, Ukraine has developed and implemented a good social market system, which is influenced by lessons learnt from the previous communist regime and the compulsions of the new world order. State owned businesses and monopolies in the free market system are equally harmful to the economy. The new system retains central planning but merges it with market oriented economic dynamics. The European social care system, where higher taxes are paid for better social health care, or unemployment benefits highlight the fact that the state and the market need to be synergistically attuned to ensure the health of the economy. Either of them cannot remain aloof and dispassionate. 5 In fact, Capitalism and Socialism are still being practiced undiluted, in many countries. However, social markets are a welcome change that gives due importance to money and human development in equal proportions. 6 The Social market is a third way or still better, the alternative way as far as efficiency and long-term policy is concerned. Even though it has its own drawbacks and weaknesses, it is a successful concept that takes practical elements from a socialistic perspective and a purely free market capitalism model. In fact, the social market allows all the elements of socialism and capitalism that, out of experience, seems to work well. For example, many of the Anglo-Saxon countries have adopted a social development model that exercises concepts that are drawn from a strong socialistic perspective and a free market capitalistic perspective. Hence, they have a more liberal work environment, a less tightly controlled market, which is flexible to change, reduced tax rates, flexible labour markets etc. in fact such states are said to be practicing a residual model since they derive their strengths from both socialism and capitalism. 7 Conclusion Capitalism is a development from the feudal order whereby the powerful handful of landlords moved on to possess capital as the new form from the agriculture to the industrial stage and now "post industrial". These stages, history of the world clearly shows, are ridden with tales of oppression by the bourgeois class who are the owner of the means through which human existence is levered. Even though capitalism can create wealth, it generates inequality. Works Cited Rothkop, David. June 22, 1997. In Praise of Cultural Imperialism? Effects of Globalization on Culture. Global Policy Forum. http://www.globalpolicy.org/globaliz/cultural/globcult.htm (accessed May 23, 2007). Russel, Hochschild. Annie. August 14, 1985. The managed Heart. University of California Press; Reprint edition. Edin, Kathryn., and Lein, Laura. April 1997. Making ends meet. Russell Sage Foundation Publications. Marx, Karl., and engels, Freidrich. May 4, 2006. Manifesto of the communist party, Cosimo Classics. Hutton, W. 1995. The State We’re In. London: Jonathan Cape. Bronk, Richard. 2000. Which Model of Capitalism? OECD Forum 2007. http://www.oecdobserver.org/news/fullstory.php/aid/345/Which_model_of_capitalism_.html (accessed May 23, 2007). Ebeling, Richard. M. 1994. Book Review. Freedom Daily http://www.fff.org/freedom/0694f.asp (accessed May 23, 2007). Stiftung, Konrad Adenauer. 2000. Globalization and the Social Market Economy. Organisation Mondiale Du Commerce. http://www.wto.org/french/news_f/spmm_f/spmm29_f.htm (accessed May 23, 2007). Hahnel, Robin. 1999. Panic Rules! Everything You Need to Know About the Global Economy. South end Press. Read More