22 January 2014

Capitalism—an irrational system in an age of climate change

Capitalism is generally recognized as having one great strength. That, of course, is as a creator of wealth. Aided by the remarkable advance of technology (some would say inspired and facilitated by capitalism) it has created wealth unknown before in human history.

Capitalism is also generally recognized as having one great weakness. It is a lousy distributor of wealth. Indeed, that goes against its basic nature which is to accumulate. It is based on greed, not altruism.

In order to balance these two characteristics, to ensure that all would benefit from the wealth generated, Western countries invented the welfare state, one of the greatest of human social inventions. Capitalism would create the wealth and the welfare state would distribute it—a just and sensible balance. The rising tide of wealth would raise everyone's financial boat. However, the system is now breaking down. The rising tide is no longer raising everyone's boat, indeed it is raising increasingly fewer boats, and with globalization, capitalism has escaped the nation state and therefore the moderating influence of the welfare state.

And there is an even bigger problem. At a time when we are polluting the planet to the point of changing its climate while simultaneously exhausting its resources, a system committed to endless accumulation is no longer rational.

Simple good sense demands an economic system designed to fit comfortably within the limits of both the environment and the Earth's resources. Fortunately such a system is readily available—co-operation. Co-ops are tried and true economic vehicles, functioning with great success at local, national and international levels. A global economy based on co-operation, with our fellow global citizens and our environment, could escape the rat race of competitive capitalism that is compromising the health of the planet. And, as the icing on the cake, co-op's one member/one vote structure offers equality and democracy to workers and consumer/owners alike, unlike the plutocratic one share/one vote of capitalist enterprises.

Those who persist in defending capitalism must explain how it can be curbed to adapt to a world facing runaway pollution and resource exhaustion, particularly that it has now broken the leash of the nation state. If they can't, they have nothing to offer.

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