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April 7, 2021

Regulating capitalism

Opinion

April 7, 2021

The recent pandemic has badly exposed capitalism, which is based on the voracious greed of the few for profit and a gargantuan appetite of a tiny super rich minority for money-making and wealth accumulation. As the contagion ravaged country after country, wreaking havoc with the lives of millions of people, the worshippers of private capital were seen exploiting every opportunity to extract money from the people, showing an utter apathy towards the plight of the hapless people.

In developing states, the indifference of money-making classes towards the common people was more visible. Those who have always served factory owners and company directors were terminated from their jobs without any compensation. In a number of such states, the capitalist class received huge amounts of money from their respective governments in the name of pandemic and business losses but they refused to extend any help and succour to workers and their families. Hefty bailout packages in third world countries compensated the losses of the industrialists but the real benefits of such packages did not reach the common workers. Millions of such workers lost their jobs, plunging them into misery and impoverishment.

It was not only the states of the Global South that failed to serve their poor but advanced capitalist countries with their laissez faire philosophy also remained unsuccessful in helping out people from the bottom layer of social stratification effectively. Out of the millions of people who perished during the pandemic, most were from the marginalized sections of society or vulnerable groups of non-whites. In North America, Europe and Australia it was mainly the working classes from the white communities that badly suffered because of the contagion. While the rich of these countries were flying to safe destinations to avoid the natural catastrophe and its ruthless onslaught, the poor were dying in hundreds and thousands daily in working class areas of Western cities and towns.

The spectre of unemployment and the deadly virus was haunting millions of working-class people across the globe but they continued working day and night, enriching their masters who made tons of money during the pandemic; but these lords did not show magnanimity or mercy. They remained adamant in making their workers toil at low wages. The large companies that grew rich over the months also refused to pay taxes that could have helped the states in the advanced capitalist world to extend help to the poor. Bernie Sanders and some other prominent Americans came up with the names of the companies that paid zero tax. Such individuals also offered a comparison between the wages that they pay to their workers and the price that they extract from consumers for the goods manufactured by low paid workers.

Many believe that the companies managed to cheat people and make money because of the absence of strict regulations or the lack of implementation on such regulations. It was because of this that strong democracies with the free market economy witnessed more deaths as compared to countries where capitalism was controlled or regulated to some extent and companies were not allowed to enjoy blanket freedom. Many of these deaths could easily have been prevented by timely actions of governments.

Lawmakers in advanced capitalist countries were quick to shower bailout packages on companies and firms but were reluctant to extend the same to the people. The preparation of the vaccine was also delayed because of profit-oriented thinking. The companies were more concerned about the price of the vaccine than the plight of the people. Despite the fact that governments all over the world pumped billions of dollars into the preparation of the vaccines, private manufacturers were allowed to earn huge profit on it. If the state had taken the responsibility of manufacturing vaccines, their price would have been much lower and it would have been prepared much earlier.

Unlike countries where capitalism was enjoying carte blanche, states with strict regulations managed to contain the damage caused by the pandemic. China, Cuba and a number of other countries that either have strict regulation or tight state control over economic affairs succeeded in saving millions of lives. China was the first country to be hit by the pandemic. It had no experience dealing with such a situation, but even then the massive state intervention helped it tide over the crisis. Only a few thousand people perished during the pandemic. The socialist country also came up with vaccines that are not only helping its own people but states across the world. Had Beijing allowed carte blanche to the private capital, things would have been much different.

Cuba almost has no private capital intervention and even then it outshined every state in the world. The number of deaths in the tiny island country has been very insignificant during the pandemic. Its excellent health system managed by the state demonstrated miracles, stunning even its critics.

It is not only the pandemic that underscores the need to regulate capitalism but the development of various states also indicates that unbridled capitalism cannot bring prosperity for the majority of people. For instance, more than 190 states follow the laissez faire philosophy but only those states that implemented strict regulations and controlled the private capital managed to serve their people. A strong state intervention in China helped it achieve a phenomenal economic growth. Even today one-third of the most successful Chinese companies are owned by the state. According to some estimates, more than 60 percent of human resource is still affiliated with the concerns run by the government. It was because of the intervention of the state that foreign companies agreed to transfer of technology.

Vietnam is another example where the government controls private capital, forcing it to follow strict regulations imposed by the state. The country has witnessed phenomenal economic growth in the last three decades. Despite the fact that a number of private companies have been operating there for years, the state still controls a significant share of economic activities with around 2000 companies with a majority share of the state while around 781 state-run companies own 100 percent share. The country did not leave the basic necessities at the mercy of the market, bearing 80 percent expenses of medical treatment for the poor and hundred percent for the extreme poor. The communist country also managed to drastically reduce poverty besides producing an excellent skilled labour that is helping the state to thrive.

This shows that the gospel of the free market can only benefit people when it is controlled by the state. Unbridled capitalism with no state intervention will lead states and societies towards destruction. It is a reality that states that managed to regulate capitalism became successful. If the free market is granted unbridled freedom, then there is no guarantee that the vast majority of people will benefit from economic growth.

Even in the advanced capitalist countries, only those states that imposed strict regulations aimed at controlling the philosophy of the free market and profit dealt with the pandemic effectively. Given this all, many believe controlled capitalism could be a forward. Therefore, if we want economic growth and prosperity for the vast majority of people, then this philosophy of the free market must be controlled and regulated.

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