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Various forms of capitalism

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The candidates in the 2020 US presidential race are proposing an array of economic policies frequently described as either free-market or socialist. These labels often confuse the American public. In particular, capitalism is widely – and wrongly – understood to be synonymous with free markets. In fact, it includes all economic systems with private ownership of property, from free markets to social democracy.
These various forms of capitalism require basic rules governing how markets operate, such as protection of property and the rule of law. Most capitalist societies also have social programs to protect the most vulnerable. Governments in capitalist economies therefore face two fundamental choices. First, they can either set market rules for the common good, or delegate this task to big business under the guise of “free markets.” Second, they can design universal social programmes with the aim of reducing inequality and protecting the environment, or scale them back in order to minimise government spending in these areas.
The choices governments make strongly influence levels of inequality, greenhouse-gas emissions, and overall well-being. To evaluate the Democratic candidates’ economic policies properly, therefore, we must understand their proposals for structuring markets and creating or expanding social programmes.
US President Donald Trump describes such measures as “socialism”, and instead praises free markets without acknowledging that markets need rules to function. Rather than having government set the rules, Trump prefers to let multinational corporations decide how to operate their own markets. Yet in Big Tech and many other increasingly concentrated sectors, deregulation does not increase competition; on the contrary, it allows big companies to rig things in their favour.
Consider the energy sector, where Trump has put Big Coal, Oil, and Gas in charge of US climate policies. Corporate bosses now determine how much they may pollute and how fast they need to develop renewable-energy capacity, while the US remains addicted to fossil fuels. In the health-care industry, big pharmaceutical companies are free to set drug prices, and large insurers reap one-quarter of the sector’s revenues. The military-industrial complex rules the Pentagon, investment banks control Wall Street, and big agricultural conglomerates hold sway over America’s farmland.
Market concentration allows a few large multinationals to control an industry, resulting in high prices and excessive executive pay. Big incumbents crush newcomers in order to maintain their market power, and then use excess profits to help elect friendly lawmakers and lobby for policies that support their continued dominance – often undermining the power of popular democratic movements.
Several Democratic presidential candidates have highlighted these problems. Elizabeth Warren, for example, blames big-business corruption for worsening inequality and the climate crisis, and undermining American democracy. Bernie Sanders has called for a grassroots political revolution to create a social democracy in the US.
Although Warren and Sanders differ on the details, both want to put government back in charge of structuring markets for the common good – including higher taxes on the wealthy and big business, along with stricter enforcement of antitrust and environmental laws. Both candidates also advocate government social programmes aimed at providing everyone with healthcare, childcare, higher education, adequate housing, and decent jobs, along with a social safety net to support them in hard times.
Other Democratic hopefuls have also advocated some of these measures, but more centrist candidates say such programs would be too expensive or even undermine freedom, thereby echoing a standard right-wing critique. Former Vice-President Joe Biden, for example, recently told wealthy donors that “nothing would fundamentally change” if he became president. Yet the US capitalist system needs a major revamp in order to tackle the climate crisis and unacceptably high levels of inequality. European countries have demonstrated how broad government programmes, flourishing economies, and freedom go hand in hand.
Some are mapping the way forward. Nobel laureate economist Joseph E Stiglitz says progressive capitalism could greatly help to reduce wealth-snatching and create a more sustainable, equitable economy. And the Poor People’s Moral Budget advocates progressive social programs funded via taxes and the redirection of existing federal spending.
Our research team at the University of California, Berkeley, has created the Sustainable Shared-Prosperity Policy Index (SSPI) to measure policies that support a meaningful life in a sustainable world. The SSPI ranks 50 countries based on three broad criteria: policies that structure markets with rules and taxes; measures to protect the environment; and government programmes that support healthy, educated people along with the infrastructure and human rights that establish a well-functioning society. By gathering data on over 50 policy indicators, the SSPI provides a practical roadmap toward creating an economy that cares for people and the environment.
All US presidential candidates should present their plans for the economy so that voters can assess how the alternatives will affect their quality of life. People need to know whether they will have access to healthcare, higher education, and childcare, along with a secure job that pays a decent wage and allows time for a balanced life with family, friends, and community.
This is surely not too much for citizens of a rich country to expect and demand. America has the resources to create a better capitalist economy, and we know which policies can improve well-being today and for future generations. Now the country needs to elect a president and Congress that can build this new system. – Project Syndicate

* Clair Brown is Professor of Economics and Director of the Center for Work, Technology, and Society at the University of California, Berkeley, and the author of Buddhist Economics: An Enlightened Approach to the Dismal Science.
* Simon S?llstr?m is the research coordinator for the Sustainable Shared-Prosperity Policy Index (SSPI) at the University of California, Berkeley.

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Saoirse McHugh: We need to talk about capitalism

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N HER FORTNIGHTLY column for TheJournal.ie, Saoirse McHugh of the Green Party writes about what we can do as individuals in the face of climate chaos.   

A most ludicrous situation is taking place in which we are disrupting weather systems we have relied on for centuries, poisoning drinking water, destroying habitats that provide food and fuel and pushing ourselves outside of the relatively stable climate we have enjoyed for the past few thousand years.

Despite all of this, most of our media and the great majority of our politicians refuse to talk about the reason why I believe this is happening. What is driving us to continue down such a grim and unpredictable path? The answer is capitalism.

Extracting profit from resources (often privately owned) and labour only to reinvest in further extraction has wreaked havoc on our world. The accumulation of profit as a shaping force in society leaves so much unaccounted for and undervalued.

In general, there is no cost given to implications such as resource use, pollution, and (much and all as I don’t like the term) ecosystem services such as air and water cleaning, pollination and nitrogen cycling.

When these are factored into cost it can have an alleviating impact, but of course the natural world does not trade in dollars and no amount of money can ever compensate for species extinction, coral reefs dying or the damage caused by oil spills like the BP Deepwater Horizon oil spill in 2010.

The need for growth and the relentless expansion into and enclosing of new commons, such as carbon use and genetic information, means that capitalism is entirely incompatible with a finite planet and a just world.

Despite all this it is rare to hear our economic system discussed openly in Ireland outside of a few groups or lone politicians. It has developed the impression of being outside of our control, almost like some God imposed this system upon us.

When the conversation comes up politically, our elected representatives shy away from it and speak in vague terms about prosperity and growth. They do not delve into the idea that not only do we have the power to begin changing our economic system, but we have a moral and environmental imperative to do so.

‘But look at North Korea and Cuba’ 

I am not fully sure why there is such hesitancy to speak about capitalism. Is it because decades of American television have well and truly damaged the ability to talk about it without somebody bringing up the Soviet Union and communism?

I myself have had so many conversations where capitalism comes up and is met with: “But look at North Korea and Cuba, look at how many people died in Soviet Russia.” No doubt atrocities occurred in countries which were under a different economic system.

However, that argument ignores and minimises the atrocities that have been carried out in capitalist countries. The suffering and destruction capitalism has caused and is continuing to cause in the world is immeasurable.

It is a system with its origins in colonialism and to this very day there is a massive extraction of wealth from previously colonised countries. The social, physical, and economic violence used to keep these relationships in place is beyond comprehension and much of it has become accepted as normal.

It is ridiculous to talk about environmentalism without talking about capitalism, yet many people do so. Not only is it a part of our lives but it is the system within which we all operate.

It is all that most of us have ever known and for that reason people tend to avoid the conversation, perhaps for fear of looking radical or outside of the world of common sense.

The promises of green growth or sustainable capitalism are tempting, yet I fear that every year spent chasing these will-o-the-wisps is a year lost while continuing to worsen our predicament.

There will be no climate justice until we move to a different economic system. We need to halt the extraction of wealth from previously colonized countries and, more than that, repay and compensate these countries as fully as possible.

Obviously, it is not just capitalism that damages the environment. There are discussions of petroleum-based socialism and of communism focused on growth, which are extremely damaging too but we have arrived at a time where capitalism is the dominant economic model.

There is no point in skirting around the issue, we need to transform our economies and recognise that any politician who is not engaging in the conversation about our economic model and ways to change it is wasting everyone’s time. 

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Letter: Socialism may not be the cure but capitalism is the illness

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Socialism may not be the cure but capitalism is the illness. All Hanson offers is more of the same prescriptions that brought us to climate change, inequality, huge government, corporate and private debts, erosion of our infrastructure, a health care crisis, international turmoil, etc.

How about some ownership and something new? If we redefine the goal as sustainability instead of growth, universal equity in services and opportunity, building community instead of dominance, and building a world for the seventh generation in the future, then we must acknowledge that capitalism as we have known it is broken.

Rather than try to pigeonhole the opposition with a derogatory label, let’s find a way to utilize human character to fulfill the promise of a better world for all living creatures both now and in the future.

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Let’s restore our values, do away with capitalism

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One of the worst things that colonialism, apartheid and capitalism did to our people was to destroy the black family structures, the writer says.

In this past decade, we witnessed a degeneration of politics across the spectrum, with social media, notwithstanding its use, becoming the worst platform for corrosive politics.

We also witnessed moral degeneration and character assassination as influenced by capitalism.

The moral degeneration in SA is very high and that directly reflects the politics of our country.

This open letter is an invitation for us, more especially ANC and Alliance partners, to think critically about who we are as a society and perhaps champion ways in which we can restore some of the values that we have lost.

No more buyers for the escapism Top Billing is selling

Of all the feasts and feats of Top Billing in the past 23 years, there are perhaps not enough Gucci slides that can quite help it dodge its flip and …Opinion1 month ago

One of the worst things that colonialism, apartheid and capitalism did to our people was to destroy the black family structures. And one of our loopholes as the ANC from 1994 onwards was not to restore our values of ubuntu and revive the black family unit.

Twenty-five years into democracy, it is in our hands as ANC to dissociate ourselves with capitalism because capitalism is an evil that causes the corruption we are seeing now.

It is capitalist ideas that are behind killings of our comrades.

Capitalism is an inherently evil system that thrives on hate, jealousy and inhumanity.

Viwe Sidali, Duncan Village, East London

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