A lot of words have been spent on discussing the end of capitalism, from Joseph Alois Schumpeter and Karl Marx to more contemporary thinkers, so what could I ever add but a personal view?
To me, at an early stage of my economic studies, capitalism was a system in which entrepreneurs created wealth in free markets and their success petered through the system as a common economic good, creating employment and income. But also creating a divide between the haves and have nots.
Socialism was about non-market distribution of means and goods, about central planning, about Utopian ideas of equality and happiness that were crushed by powerful party structures that gave us the Gulags, re-education camps and a rich inner-circle of a new, non-blood, aristocracy.
In Europe, since the middle of the last century, most countries have found a sort of compromise in which the excesses of capitalism – as in the power of the employer over the employed, of the establishment over the newcomers – have been mitigated by a social protection net and access to education.
We were free from large wars and there was economic growth, prosperity and political emancipation. Free trade became a powerful slogan to remove unfair shackles to global commerce, allowing the West to access resources and markets at the other end of the world and, supposedly, transferring some wealth to poorer nations.
Free floating currencies, independent central banks and regulators, free speech, spreading democracy, sexual freedom, religious tolerance (up to a certain level), a splendid combination.
However, as Schumpeter predicted in a way, the success of capitalism turned into auto-destruction.
“Free” markets created gigantic powerhouses in commodities, resources and IT products where prices are way above “fair” levels due to lack of competition, from the latest tablet, to palladium to professional soccer or football players.
“Free trade” destroyed jobs for John to create far-less paid jobs for Jim. “Free” financial markets gave us the mortgage disaster and banking crisis, “free” currency markets have turned into a currency war with the yuan, yen, dollar and euro in a “beggar-they-neighbour” cheap money and devaluation stand-off in which nobody stands to win in the end and everybody's savings and pensions will be depleted to wipe out the debts carried by underfunded states that needed to rescue big banks.
“Free” speech and democracy created unwieldy bureaucracies, shady political deals and allowed corruption. “Free” press turned into journalism for free...depleting business models, savaging media jobs and muzzling what could have been a watchdog for freedom. So should we end freedom? Should we adapt the Chinese model to Europe and the U.S.? No. No. No!
Freedom is the highest good – as soon as you can feed yourself and your family, or actually even then. Freedom of opinion, speech and religion. Freedom needs to be protected and defended from fundamentalists of whatever political, religious or criminal creed. So what is the answer? To me, it is even more freedom, but with a difference. Call it “Freedom 2.0”.
The freedom of information, the freedom of people to access public records, the freedom of shareholders to obtain corporate information. The answer is more democracy, and the power to regulate where freedom is at stake.
The answer is more freedom of opinion and access to open media such as on the Internet to express points of views and cry wolf if needed, name and shame when warranted, or heap praise and pile support when merited.
Transparency, democracy, rule of law, those three should be the main pillars.
The price is that people will have to spend more time and resources on being informed, involved and engaged. But that is a small price to pay compared to the alternative of subjecting to a new quasi totalitarian system of either an economical, political or religious kind. On our wide-web-world makes it easier.
The reward would be more influence on how we live, what we do, how we work, what we eat, how we treat the environment etc..
So, am I proposing a sort of a return to the lowest level of democracy with people debating on town squares – if that ever happened; even in the old Greece, the birth place of democracy, people were far from equal or free – with political structures devolved to regional and national levels?
Nope. We are in a global village inhabited by billions. To be heard you need to count, that means political cohesion, cooperation instead of competition, coalitions instead of chaos, a “citizen civilisation” instead of “consumer choice”.
But that is just my personal view.