Will Capitalism destroy the World? | The Power of Money | Dhruv Rathee


Has Capitalism improved the world? Or is Capitalism an ideology that has destroyed the world?

Come let's understand the successful ideas of Capitalism and its failures. 

Starting with the positives: The largest successful idea of Capitalism might be Decentralisation. In capitalist countries, everyone has the freedom to start their own business. 

Even you can start a business. And every year there are lots of new businesses starting up. These businesses work independently from each other. It means that they are Decentralised. In fact, they compete with each other which leads to innovation. 


On the other hand, in communist-socialist countries like the Soviet Union, everything is controlled by the government. All major production areas and industries are controlled by the government. There is only one point of control.Centralisation. 

For the top few people to control all the productions means of the country and to balance the economy is very difficult. This is believed to be one of the major reasons for America's win against the Soviet Union during the Cold War. Because of the central planning of the Soviet Union, their growth was far less when compared to America's. 

When these numerous  decentralised businesses in capitalism work independently, They will also compete with each other to better themselves. They get a financial incentive here: the Profit. To earn this profit, the businesses would want to work better. 

Better than their competitors, which will lead to innovation. So Capitalism provides a financial incentive that triggers Innovation. Because of this innovation, in the last 100-200 years, in Capitalism we have seen a level of technological development that we had not seen in the two thousand years of human history. Think about it. 

Cars, Airplanes, the Internet, Computers, Cameras, all these were invented in the last 100-200 years. People favouring Capitalism also argue that because of it, in the last 50 years, poverty has fallen globally. The education level of people have risen And the overall living standard of people has improved a lot. Another positive point of capitalism has been that it lets everyone dream. That you too can reach the top if you want. 

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Everyone has a chance to reach the top. If you work hard, you too can become like Bill Gates or Elon Musk. Whereas, in a Socialist and Communist system, it is not possible for you to become that rich. Additionally, a consumer, in a capitalist system, has more options in every aspect of life. 

Take India's example. There was a time when there was only one channel on television: Doordarshan. Which was run by the government. But when the television sector was opened up for privatisation, and there was a free market, you have numerous options today. 

There are so many channels on TV. Your choices have increased manifold. Your entertainment value has increased. It has similarly affected several other sectors. Many people will list out these benefits of Capitalism that I told you and will promote this ideology without a second thought. They'll promote privatisation. But it is important to understand that there are several adverse effects as well. 

In fact, some of them are so harmful that they may destroy the world. The first failure of Capitalism is Monopoly and Income Inequality. It's true that Capitalisation has Decentralisation, that you have the freedom to start your business, but realistically, what happens is that businesses merge among themselves. 

Large businesses often take over smaller businesses. It is possible here that one business may buy out all its competition and they become only one company. If there is no more competition and one company rules the entire sector, it is termed as Monopoly. This is often seen in Capitalism. Once a company establishes a monopoly, it is terrible for the consumers because the company may increase the prices, it may even exploit the consumers. 

Like nowadays in India, many people believe that Jio almost has a monopoly in the telecom sector, and the other companies are not able to compete with it. Another phrase used in Capitalism is Acquire or Get Acquired.' Suppose you're a fish in a lake. Either you grow by eating other fishes, or a bigger fish will eat you. Capitalism works similarly. 

Either you start acquiring other companies to grow yours or some bigger company would absorb you. 

Do you remember there used to be a company Jabong?

Myntra acquired that. And Myntra was later acquired by Flipkart. And then came the international giant, Amazon. Flipkart had two options. Either Amazon acquired it or Wal-Mart. 

Today, the companies termed monopolies have become so by acquiring other companies. In social media, Facebook is considered to be a monopoly because Instagram and WhatsApp, that are the two most used social media apps, are owned by Facebook. 

Google is also said to be a monopoly in the world of the internet because YouTube, through which you are watching this, is owned by Google. Android is owned by Google. Google Maps, Google Shopping,  Google Pay, Google Loans In fact, the parent company of Google, Alphabet, has acquired 241 companies. 

What I mean to say is that this whole system creates inequality. Where the rich people and the rich companies have all the wealth, and the small businesses cannot compete with them in reality. 

In theory, there is competition in Capitalism but in reality, how can small businesses compete with these monopolistic giant companies? 

In the last 30-40 years, since the neoliberalism ideology staged a comeback globally, income inequality has risen rapidly across the world. It was reported in 2017 that the top 1% of people, control over the 82% of the new world generated in the world now. The richest 42 people in the world, hold as much wealth as half the population of the world. That 3.5 billion people collectively own. It is not possible that these 3.5 billion people are extremely lazy and only these 42 people have worked hard to get this rich. There is no direct Co-relation with hard work. 

The capitalist system works like this. Those who have wealth can create more very easily. The "Money Begets Money" concept. And the other thing that I told you now, 'Acquire or Get Acquired.' Either eat small fishes and grow or some bigger fish will gobble you up. 

Thirdly, there's another saying similar to "Money Begets Money". Poverty Begets Poverty. The poor people do not have the capital to invest. If they don't have the money to start with, it will be extremely difficult for them to rise. They would not be able to spend on their education or health and eventually, they won't be able to generate wealth. To counter this, the governments of many countries provide free education. 

The next failure and probably the greatest failure of Capitalism has been Environmental destruction and Societal destruction. On one hand, I said that the poverty rates have drastically fallen in the last 100 years, literacy and education rates have risen rapidly. In the same 100 years, the environmental destruction that we've seen hasn't been seen in 2000 years, or even the entire human history. 

The speed of deforestation, extinction of biodiversity and increasing climate change, is unprecedented. And this happened because in Capitalism, companies focus only and only on their profits. They are not concerned about the global effects of deforestation. 

As long as they keep getting their profits and keep getting richer. This craving for profit is not only destroying our planet, but it also negatively affects our society tremendously. It's true that consumers have choices. They're free to choose what they want to buy from which company. But in reality, companies bombard us with ads. These changes the mindset of the entire society. In the ads, it's shown that the chemically altered, processed, fatty burger is very good for you. You'll be happier when you eat it. 

And when you'll see numerous burger stores around you selling these burgers when your friends and family members would want to eat here, you too would want to eat there. You'll want to eat this burger, which will eventually lead to obesity. In America, 34% of adults suffer from obesity. In the list of countries where the cancer rates are very high, America is at number 5. America is a capitalist country where a free market has been given to fast food like the brands of sugary drinks, they can sell whatever they want, run ads showing whatever they want. All for the sake of earning profits. 

In fact, to earn profits, companies have misled consumers into buying things which were harmful to them. Things people didn't need but their demand was created by the advertisements. Major examples of this are the tobacco and alcohol companies. They run ads that make people feel having their product will make them proud they'll get the respect of society. But every example is not this extreme. It gave rise to Consumerism as well. 

Think about 50 years ago. What did a common man need? What did the society consider necessary for a common man to have to lead an easy life? A house, a secure job and good food. Nowadays, how many more things do you need to be at a respectable level in society? You need a house, a car, a mobile phone, at least 10 new clothes, shoes, and every year or two you need to get new clothes. Only then will you be considered at a respectable level in society. But think about it, 50 years ago, how many clothes and pairs of shoes did your grandparents and great-grandparents own? This capitalist system forces people to buy this and that and everything. 

The more you buy the better. The more new things that you have, the better for you. The latest iPhone and the latest car model, the more you buy and the more you consume is better. Why? Because the companies will get more and more profits. This system works on the model of infinite consumption. 

As many people buy as many things that they can. But in reality, the resources are finite. And this is the reason why we are seeing large-scale environmental destruction because of Capitalism. This system attacks your insecurities to sell products. 

If your skin is dark, buy a fairness cream. If you're a bit hairy, buy this laser treatment. If your lips, nose, face is not the same as such and such top celebrity, buy these new surgeries. You're short, buy this new drink to getter taller. 

And finally, talk about the failure of capitalism to protect democracy worldwide. When compared with communism, capitalism has historically been better suited for democratic structure. There have been dictatorships in communist countries frequently. But capitalism worked well with democracy and thrived. I am not saying that there weren't dictators in capitalism. But in general, capitalism has a better record. But the failure of this system, this ideology is seen when companies get so huge and have so much wealth that they become more powerful than the government. 

In such cases, the companies can easily bribe the governments, buy out the governments and even help in manipulating the elections. Companies are concerned with their profits only. If they feel that they'll get better benefits if a particular politician wins, they'll fund that politician and support their election campaign. This might happen publicly, like in America, known as Lobbying. This is legal in America. Which I believe to be extremely wrong. 

In countries like India, it isn't very apparent. Especially since the passing of the electoral bonds. Which company is funding which political party? We have no idea. But overall, all the companies will help that political party to win that will give them the most benefits. This corruption can work in all aspects and is very harmful to every country. The company might pay money to the government forcing them into selling forest land to them. To put the forest on sale. And the government would comply. 

Companies may ask for the rules to be changed in such a way that though the citizens may suffer, the companies are benefited. The government would comply. The government would basically become puppets in the hands of the companies. This is often an accusation against countries like America. To deal with these failures of Capitalism, countries around the world have come up with different strategies. 

Which are the socialist ideologies that have tried to counter the various failure of capitalism. 

Thank you…!!!

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