Irony of Capitalism

Himakshi Butan

Winston Churchill once said “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries”. Not just him, numerous other learned economists like Karl Marx, Joseph Stiglitz have expressed their dissent over the concept of capitalism.
For those who are not of an economic background, let me delve on into the concept of capitalism for you. Capitalism is basically an economic system where government plays a secondary role. Most of the property is owned by individuals and companies. It seconds the concept of the survival of the fittest. Profit maximization and self interest are the mainspring key elements of capitalism. Certain countries like united stated of America, Canada, Germany, Japan fervently follow this system. Economists like Milton freeman, John Maynard Keynes, Adam Smith have whole heartedly supported capitalism. Milton freeman in his book ‘capitalism and freedom’ has described how crucial capitalism is for liberating economies. Along with economic and political freedom, capitalism helps in efficiency, innovation and economic growth. Like the two sides of a coin, capitalism can also be seen with two different perspectives. Albeit its advantages, there are certain negatives that makes the application of this concept questionable. This is basically the irony of capitalism.
In his book, ‘Das capital’, Karl Marx argues that an economic system based on profit making is inherently stable. He quoted “This is an unsustainable way to organise society and it will eventually collapse under the weight of its own contradictions”. Capitalism allows autonomy to firms that enable them to gain monopoly power in product and labour markets.

केजरीवाल सरकार का फैसला, कोरोना संक्रमण से मरने वाले स्वास्थ्यकर्मियों को देंगे 1 करोड़ रुपए

They tend to exploit their position and charge higher prices. A capitalist society does not only to create equality of output but also equality of opportunities. Now, Some of you must think that isn’t It fair to seek reward for your own hard work? It is indeed. But what about those who are born into destitution? Is it fair to them that they don’t get any opportunities to fight their fate? Owing to the availability of ample resources, the rich keeps getting richer and the wealth is passed on for generations. This creates social division and widens the gap between rich and poor. Also, in such societies, social benefit is mostly ignored. A free market tends to ignore externalities. Firms focus on lowering costs even if it is detrimental to the environment for example pollution. A lot of people have expressed their concern about it is impossible to beat climate change with a capitalist approach. Under capitalism, economies must keep growing. Given that our natural resources are finite, this continuous growth might kill us. Recent scientific studies have showed a direct link between economic growth, energy use and carbon emissions.

Bhaichung Bhutia offers his own residence to migrants in Gangtok, Sikkim
In some of the most popular capitalist economies, a huge disparity is observed in distribution of wealth. In the USA, the richest 1 per cent own 34 per cent of the wealth and the richest 10 per cent own 74 per cent of the wealth. In the UK, the richest 1 per cent own 12 per cent of the wealth and the richest 10 per cent own 44 per cent of the wealth. In France the figures are 24 cent and 62 per cent respectively. These figures show that the system of capitalism creates a vast social divide that the economies fail to overcome. If this isn’t the irony of capitalism then I wonder what is.