Is Capitalism Dead?
Capitalism has worked to varying degrees for many centuries as it created jobs and prosperity for millions of people. More recently it has been less successful and critics argue the system is broken and can’t be fixed. Are they right?
Governments spend billions
Governments around the world have spent billions of pounds to kick-start economies since the financial crash in 2007, even though little has reached the real economy.
Big banks, billionaire financiers, corporate tax avoidance and too little regulation are often blamed but the reality is worse and goes deeper.
The truth is our system of capitalism is broken and no longer does what it is supposed to do to support the economy.
The system used to serve small and large businesses but has been side-tracked to serve the financial markets, which is neither desirable nor sustainable.
The original process of using people’s savings to invest in business has been abandoned and represents only a small proportion of what the system now does.
Instead the majority of its money circulates within the confines of the financial system and is not used to back investment in new and growing businesses.
Capitalism, as a result, is rightly criticised as it fails to achieve its central role of supporting business, creating jobs and growing the economy.
For centuries capitalism used finance to fuel the growth of business as the economy transitioned from agriculture to manufacturing to services.
But it was never the intention that the system’s resources would be used to primarily fund the financial economy while starving the real economy.
Time for change
The financial system has grown too big and is too damaging to the rest of the economy as it sucks resources from all quarters to satisfy its greed.
Regulators have steered us to this point of crisis but their approach can change to restore the system before the good capitalism can do is lost.
The answer lies in the need for the system to once again find its true calling and support the mainstream, as well as the financial, economy.
Entrepreneurs and small businesses are entwined at the heart of the economy and it is wrong that the system doesn’t prioritise them for investment.
The current style of capitalism is failing the people who depend on it most and stalling the economy at a time when it desperately needs to grow.
The majority of people know the system is broken as they feel it in their pay and see it in growing levels of inequality, as money flows to the rich and ebbs from the poor.
But the majority of people also know the system can rediscover its true purpose and support businesses and the economy.
SO, capitalism has worked in the past and can work again in the future but in its current form it is killing the mainstream economy and itself.
