The Capitalism vs Socialism debate has been continuing since decades, and it is definitely a very engaging and pertinent one at that. It was at its height during the Cold War era, when the world was split into two halves on the basis of this ideological difference, and continues to be relevant to the 21st century scenario. In a nutshell, capitalism basically entails an economy where trade and business are controlled by private owners, without interference by the State, and profit generation is the main priority, while on the flip side Socialism advocates that the processes of trade and exchange should be controlled by the state or the community as a whole. However, these two terms have transcended a mere ideological meaning and with the collapse of the Soviet Union in 1991, and the US taking over as the global hegemonic power, capitalism, more importantly that as practiced in the West, has become a way of life.
In an ideal situation, with the free market gaining the reins of control, where every person is engaged in profit making, there would be a potential for greater development and scope for more employment; where the producers are able to sell their goods, keeping the prices stable and in line with other producers, and where there would be a constant strive to increase the quality of products and greater employment would lead to a better standard of living with more revenue generation and circulation in the economy. The producers would benefit on the basis of merit, and the less deserving would be weeded out, thereby ensuring that the best of the best remain. However, though the situation seems bulletproof, it is only too utopian and has many loopholes. The fact of the matter is that the economy, from being a free market one, would inevitably be seized by the ones with more power and resources, resulting in the creation of monopolies. These monopolies become so invincible, that there is hardly any scope for the entry of other producers on the scene. These high and mighty corporations, blinded by greed and the thirst for profit making, create abominable working conditions for their employees, who in dire need for wages have no other option but to suffer.
In this context, it may be prudent to highlight the World Systems Theory, which aims to grapple with the reason why the rich countries of the West are rich, and the poor countries are poor. In simple terms, this theory proposes that the rich are rich at the expense of the poor. With huge amounts of resources at their disposal, products could be siphoned off to other countries, generating huge amounts of profit. Another important factor is the availability of cheap labour, from the third world countries. During the medieval period, slavery was unheard of, but with the dawn of the early modern period and the rise of European capitalism, slavery as an institution emerged and the slave trade became increasingly evident.
Although colonialism has come to an end in the 21st century, this has not brought about an end to exploitation. Colonialism has simply given way to neo-colonialism and neo-imperialism, which also entails a relationship of domination and subjugation between a strong and a weak country. The difference lies in the absence of political control. The question that arises is this– How is this domination still maintained? The answer lies in the existence of Multi National Corporations and the promise of Western aid to the weaker countries.
We’ve all wondered at some point of time, what is the point of paying twice the amount of money at a globally recognised food joint or pay an insanely high amount for a tub of popcorn at a multiplex. Nevertheless, we all do it, and it is almost like a Catch-22 situation. The crux of the matter is that other small, emerging businesses are in the dump, unable to rake in even a basic amount of profit. Many of these globally recognised MNCs are guilty of providing deplorable working conditions for their employees, and the pay is almost abysmal. Due to global recognition, expanding into third world countries is almost a cake-walk, which is very lucrative for them.
Coming to the second point, Western countries promise to aid and abet the weaker ones by promoting the policy of market fundamentalism, but in reality, under the garb of assistance, their ultimate aim is to keep the third world countries dependent on economic institutions such as the IMF and the World Bank, and it goes without saying that this aid comes with a price; unflinching dependence and subservience to these institutions.
However, this is only a very morbid view of the situation. We should not nourish the notion that capitalism is entirely faulty, because the world wouldn’t have been where it is now without the free market policy system. However, some of its vices are only too difficult to ignore, and somewhere we cannot help but notice how the world is almost sucked into a Capitalist loop of hell.
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