Slums in Capitalist Utopia

One out of every two Mumbaikars is a slum dweller, according to the latest report of a research carried out jointly by the Brihanmumbai (Greater Mumbai) Municipal Corporation and the UNO.  Mumbai (Bombay) is the financial capital of India.  50 percent of the population in the financial capital of a flourishing economy live in slums.  Worse, the slums occupy only 5 percent of the total area of Mumbai. 

One of the worst pitfalls of the present capitalism-driven globalisation is the rapidly widening gap between the haves and have-nots.  Globalisation promised more wealth for more people leading eventually to the wellbeing of the whole mankind.  What has happened, however, is more (and more) wealth for a few people and greater misery for the rest.

Most of the countries that capitulated to globalisation ended up with debilitating economic disparities.  Poland, for example, embraced globalisation in the early 1990s.  The country’s economy was liberalised and privatisation gained full momentum.  As a result unemployment skyrocketed.  Even now Poland has the highest rate of unemployment in the European Union.  40 percent of young workers were unemployed in 2006 (after a decade-and-a-half’s economic reform), twice the EU average.  If 15 percent of the country’s population lived below the poverty line before globalisation, the figure rose steeply to 60 percent after globalisation. 

Deng Xiaoping imported the corporate economy into China ten years before Poland was forced to do so.  When Poland was beginning to learn the lessons in corporate economy from Jeffrey Sachs, China was pumping bullets into the hearts of young student-protestors in Tiananmen Square.  Five days after the bloodiest massacre in modern China’s history Deng dismissed the protestors as “the dregs of society” and declared that he was protecting not Communism but capitalism.  Capitalism received a red carpet welcome to China, the carpet reddened with the blood of Chinese youth.  A decade-and-a-half later 90 percent of China’s billionaires are the children of the Communist Party officials who became the country’s corporate honchos.  Hundreds of millions of Chinese workers today work in sweatshops or similar conditions.  Despite the 9 percent annual economic growth, more and more Chinese are rendered incapable of having the basic services like primary healthcare and education.  With low taxes and tariffs, corruptible officials and abundant low-wage working population, China today is the sweatshop of the world, thanks to globalisation.

Globalisation was foisted upon South Africa’s gullible ANC and consequentially on the black South Africans as the price they had to pay for liberating themselves from apartheid.  Ten years after its globalising enterprises what has South Africa achieved?  The number of people living on less than one dollar per day doubled from 2 million to 4 million.  The unemployment rate for black South Africans more than doubled from 23 percent to 48 percent.  Of South Africa’s 35 million black citizens, only 5000 earn more than $60,000 a year.  The number of whites in that income bracket is 20 times higher.  2 million people lost their homes in the decade-long period of globalisation.  About 1 million people were evicted from their farms in that period raising the number of shack dwellers by 50 percent. 

In 1989, before Russia rolled out its red carpet to the market economy, 2 million people in the Russian Federation lived in poverty, on less than $4 a day.  In 1996, 25 percent of Russians – about 37 million people – lived in poverty described as “desperate.”  In 2006 the Russian government admitted that there were 715,000 homeless kids in the country, while UNICEF put the number at 3.5 million.  Many Russians committed suicide unable to carry the burden put on them by the liberal economy of their country.  “The years of criminal capitalism have killed off 10 percent of our population,” lamented Vladimir Gusev, a Moscow academic at a 2006 demonstration.  Russia is losing about 700,000 people a year due to poverty and poverty-related reasons such as crimes. 

There are more examples from other countries.  But let me conclude.

I have taken most of the material for this article from Naomi Klein’s book, The Shock Doctrine.  Let me conclude this with a quote from the book.

The movement that Milton Friedman launched in the 1950s is best understood as an attempt by multinational capital to recapture the highly profitable, lawless frontier that Adam Smith, the intellectual forefather of today’s neoliberals, so admired…

Where Smith saw fertile green fields turned into profitable farmlands on the pampas and the prairies, Wall Street saw “green field opportunities” in Chile’s phone system, Argentina’s airline, Russia’s oil fields, Bolivia’s water system, the United States’ public airwaves, Poland’s factories – all built with the public wealth, then sold for a trifle.

The wealth that belongs to the whole country is being given very generously to a few individuals who have the financial capacity to bribe the political leaders and pay the prices quoted by them.  Look at some of the land deals for various industrial enterprises and SEZs in India, for example.  Public wealth has slowly been handed over to a few individuals in the form of shares in the stock market.  As a result more and more people will move out of the purview of the government.  Less and less people will come to inherit the earth.  More and more people will move into slums….

Needed an Alternative to Capitalism

 

Socialism was tried in many countries in various forms and found to fail.  It failed more because of the assaults it could not withstand from capitalism than because of its conceptual non-sustainability.  Socialism is more broad-based in outlook than capitalism.  It seeks to ensure the welfare of the whole society.  Consequently it makes more demands on certain individuals particularly those who are more ‘capable’.  Capitalism focuses on individuals.  It is always easier to look after one’s own affairs than those of a group.  In other words, capitalism is easier to practise than socialism.  It is only natural that an ‘easier’ theory supplants the more difficult one.

Capitalism is a highly limited system.  First of all, it deals only with economy.  But man does not live in an economy; he lives in a society.  The total neglect of the social dimension of man is the most severe handicap of capitalism. 

But it is at the same time the greatest advantage of capitalism too.  It is always easy to save oneself and capitalism gives us that easy option.

Capitalism asks us to produce things, consume them as much as you can (not as much as you want), sell your products for the highest profit and keep on amassing the profits. An individual’s place in the capitalist hierarchy is marked out by the profits he accumulates.  The ‘capitalist’ obviously accumulates the maximum profit.  He employs labourers – skilled and unskilled.  He pays them according to their contribution to the profit-making process.  But who are the real profit-makers: the unskilled labourers who toil for hours or the skilled ones whose jobs may be much easier or the decision-makers such as the MBAs or the ‘capitalist’ who doles out his money?  The answer is too obvious to be mentioned.

Michael Albert, who is promoting an alternative to capitalism named Participatory Economics, says that “capitalism violates all the basic values; it does not promote equity, solidarity, efficiency, environmental sustainability, self-management, or diversity. In fact, capitalism does the contrary. Capitalism generates atomized, self-interested behavior, not solidarity. Capitalism generates inefficiency since it is based on individual actors. Capitalisms’ environmental record speaks for itself; it destroys biodiversity. Capitalism generates huge income and wealth differentials. Capitalism does not promote self-management but instead generates a situation where a few make decisions for the many. Capitalism does not generate diversity, it pushes people into boring and repetitive jobs, and creates a consumer culture based on a few brand names.”

Socialism may not be the appropriate alternative to capitalism.  Albert puts forward Participatory Economics as a better alternative.  (For more information on Participatory Economics, please click here.)

Perhaps capitalism is not as popular today as it was a few decades ago.  People are increasingly being disenchanted with the economic depressions and huge disparities in wealth engendered by capitalism.  Being neither an economist nor even a student of economics, I cannot present an alternative theoretical framework.  But I do believe that the present capitalist system will sooner or later give way to a more humane, more cooperative (rather than competitive), and more inclusive economic system.  My optimism is bolstered by the success of endeavours such as the Wikipedia which bears testimony to man’s readiness to contribute freely (and anonymously too) towards the betterment of the species.