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.


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6 Responses to Needed an Alternative to Capitalism

  1. Aram says:

    Dear Sir,
    I have always hoped for a socialist economy which is not accompanied by suppression!!
    Capitalist econmy looks perfect in ayn rand books only it seems!! after all no one cn be so ideal as john galt or roark!!

    aram 🙂

  2. DMR Sekhar says:

    Good ideas. I read this at a time when I am writing an article titled” Evolution of human societies” which I will be posting as a Knol.
    Thanks, matheikal Saab.

  3. feddabonn says:

    …i’m insanely pleased to see my old teacher have anarchist leanings! 🙂

    you might try and watch a movie called ‘the take’, directed by avi lewis and naomi klein (of no logo fame). talks of how argentinian workers took and ran factories after the capitalist masters had declared bankruptcy. very inspiring-not least for the different models used to run the factories, some share all profits equally, some have supervisors, some don’t.

    the movie isn’t available in india yet, but can be downloaded on torrent downloaders.

  4. So matheikal, you are an “old” teacher! That should have brought a a big smile to your face. You are so lucky! But, you are not yet an anarchist, at least not from where I look at you.

    Capitalism has a single focus: efficient distribution of resources. It never questions the effectiveness of the efficient distribution. Capitalism’s norms are highly restrictive.

    The political systems that are allowed by capitalism to exist (democracy of whatever form) do step in occasionally to correct egregious errors but they rarely emerge from the shadow, as values in themselves. The farcical socialism of the USSR (it was indeed state oligarchy) is more environmentally unfriendly. The biggest problem with capitalism is it adheres to Social Darwinism and promotes the “Homo economicus” conception.

    Raghuram Ekambaram

    • matheikal says:

      Thanks, Raghuram. No, I’m not an anarchist. Michael Albert is. This person who claims to be my student might be refering to my citing his example… I don’t know this guy who is supposed to be my student!

      • feddabonn says:

        @matheikal: i’m sorry if i have caused offence- i didn’t mean to.

        my name is baruk, i was your student from 1995 to 2000. i generally avoid introducing myself as an old student because of the awkwardness it causes when i am not remembered. i can imagine the sheer number of names and faces a teacher would need to go through every year! 🙂

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