Is capitalism the only system that works? On the one hand, capitalism promotes innovation and economic prosperity and has lifted over a billion people out of extreme poverty since 1990. On the other hand, the relentless pursuit of economic growth is trashing our environment and leading to a growing gap between rich and poor.

What do our readers think? We’ve had thousands of comments over the years from readers who are convinced that capitalism is the only system that works in practice and that there are no viable alternatives. Is this true?

To get an answer, we turned to Yanis Varoufakis, an economist, former Greek finance minister, and currently a member of the Greek parliament. In his new book, Another Now, he explains why he thinks capitalism doesn’t work and proposes alternatives for the future. What are those alternatives?

We are already living in an alternative to capitalism. I believe that capitalism has already evolved into something different, something that the historical defenders of capitalism would not recognise as capitalism. When I was growing up, there was the great clash between Left and Right, between those who believed in a decentralised, competitive market mechanism to organise the distribution of scarce resources among competing needs and those who believed in central planning or some kind of social democracy.

Since the crisis of 2008, we have a completely different situation, because financialised capitalism collapsed in 2008. Finance was refloated by central banks printing mountains of money, but market capitalism was not. We have lived in a state-financed economy for the past twelve years. Without the central banks – the European Central Bank, the Bank of England, the Bank of Japan, the Federal Reserve – the whole thing would collapse. So, it’s a mistake to think of the system we live in today as a market-based system.

It is a central bank-based system with a small number of companies doing remarkably well. The New York Stock Exchange is effectively propped up by 10 companies. And these are feudal fiefdoms. As soon as you enter Amazon, you leave capitalism, you leave the market, you are in a thing that is effectively owned by one person. So, we have a kind of techno-feudalism. The question is no longer whether there is an alternative to capitalism, because we already live in post-capitalist times. We had better choose the kind of post-capitalism that is compatible with the survival and flourishing of the species.

For a different perspective, we also turned to Fredrik Erixon, an economist and author from Sweden, and the director of ECIPE (the European Centre for International Political Economy), an independent think tank that supports the principles of free trade and economic freedom. What does he think?

Well, obviously there are a lot of countries in the world that practice a different form of economy than capitalism. That has also been true historically, so you don’t have to invent new systems to find alternatives to capitalism. I think what might be more useful is to talk about different variations of capitalism; the extent to which you want to have a free and open economy, the extent to which the government regulates the markets in which different companies operate.

Part of the definition of capitalism is a capitalist culture, and ‘capitalist culture’ basically goes back to this idea that the purpose of capitalism is to promote a lot of change. It’s there to promote innovation and technological change and to make sure that people’s wealth and quality of life improves over time.

Now, you can put a very big question mark behind the question of to what extent this capitalist culture is still alive today at all. People will say: ‘Well, you know, we probably live in the most innovative age ever. Just look at what we’ve done with the iPhone since it was introduced in 2007. Let’s look at the telecom revolution, since the early 1990s, etc.’ All of that may be true, but if you look at various indicators of capitalist culture, you find that the pace of innovation has slowed over a long period of time, that we have far too few industries, far too few companies out there to change markets, disrupt markets and basically try to end the lives of their competitors.

We have a much better organised competition, a kind of competition where companies don’t have to invest so much more in research and design, in innovation, in order to have a successful future and give a good profit to the shareholders. So, even if we have a system where many companies are privately owned, we can still say, and this is also true for countries like the United States, that the capitalist culture has eroded over the last 40-50 years, that we don’t produce as much change, which could lead to much more productivity, better use of resources and of course higher prosperity.

Are there alternatives to capitalism? Is capitalism the only system that works? Do we need to change our system to fight inequality and environmental degradation? What alternatives are there to capitalism? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!

Image Credits: Photo by Koushik Chowdavarapu on Unsplash

65 comments Post a commentcomment

What do YOU think?

  1. avatar

    Capitalism exists for 200 years which is exactly 0.1% of history of Homo Sapiens. Does this answer your question?

    • avatar

      Крис Караджов And how did that work out for humanity?

    • avatar

      John MT bad, as we all know

    • avatar

      Michael Šimková Dreams come true when you work with them, everyone wants to be successful and you can succeed with a short time while sittings at home without sending money to anyone we received money through Bitcoin and we also send through Bitcoin, do you have a verified coinsph wallet or gcash??? message her to get started immediately Amber Amelia

  2. avatar

    There are proposed alternatives, but nothing remarkable. Capitalism with social welfare programs seems to be the best way to go.

    • avatar

      John MT Indeed, but with a legitimated organisation, that is nothing else than the Nation State protecting individual freedom. Capitalism should be limited to the nation’s interests !!! A sovereign state, whatever regime it has, cares more for the social organisation of its citiezens. A technocratic organisation focusing on the fierce concurrence of the market, only cares for the return on investment. The collective limit should be legitimated by history and not legalised by international technocratic treaties ! The New World Order, technocratic totalitarism, the stakeholders’ society is a the worst invasion !!!

  3. avatar

    Capitalism is ok within clear boundaries. There needs to be an equal level playing field at global scale so that social and environmental externalities of capitalism are kept in check. Otherwise it’s too easy for some to enjoy a free lunch. The alternative is what the ‘doughnut’ of sustainability requires: there must be a social floor and an environmental ceiling to capitalism. Free-for-all capitalism is too dangerous otherwise.

  4. avatar

    In case we really wanted it the very first step should be to leave the UE, this economic association binded to NATO ! Otherwise you are calling for TRANSHUMANISM and the New World Order !!!! EU should split up into sovereign states in case we really wished to see a better world… So far geopolitic is the main purpose of the USA and the EU Treaty is bindig us to NATO … and this is extremely well explained in a nutshell: In-Depth International Relations Analysis : The European Migration Movement 25:060:28​ – Description of the European Refugee Crisis0:52​ – Origin of the Migrants / How did they enter Europe (Routes)?3:50​ – War affected regions in the Middle East4:57​ – Causes of Migration5:56​ – What is the real reason behind European Migration8:09​ – How USA uses Liberalism & Democracy to gain control (Indian Example)12:20​ – Rise of the Neo-Conservatives in the American Politics14:22​ – Iraq invasion and Syrian invasion17:14​ – Sudden incoming of Migrants in Europe caused serious problem20:13​ – Explained the Insider – Outsider theory22:03​ – Summary of the European Migration Crisis23:06​ – Difference in Eastern & Western culture / value / philosophy24:21​ – Final thoughts & conclusion!

  5. avatar
    EU Reform Proactive

    Interesting what our learned economy professors and the many think tanks have to say!

    More importantly and interesting to know is what our learned national & supranational representatives think & would propose to us.

    If some unlearned representatives don’t know- why appoint any of them in the first place? Why pay ‘Agent fees’ for acting as a go-between of the learned and the unlearned?

    There is a limited group of national taxpayers (justifiably) financing their national parliaments and they are the same poor buggers who also fund another 705 EP members, from 27 EU countries, split into 7 political groups, representing 447 million EU people out of 748 million Europeans or ~60%!

    This different ‘feudal fiefdom’ calls itself a supranational democratic Union- celebrating with Ode to Joy for given permission paying through the noses for indirectly elected bureoucrats.

    Please cut spending on all feudal fiefdoms, like a wasteful bureaucracy and ‘parliamentarian capitalism’. Rather switch to a virtual, less expensive, lean, and mean democratic model- like ‘direct democracy’.

    For starters, move the comma of 705 one digit to the left & reduce the EP to 71. That will do! The learned are very good at juggling the figures.

    Please EU work it out & present your plan for approval to the voters- online! Thank you kindly!

  6. avatar

    lets stop with the bs ok, we dont have true capitalism, especially not in europe. unfollowing this page

  7. avatar

    It works great ; climate crisis, chronical unemployment and global inequality.

  8. avatar

    is that the reason that the EU is supporting Agenda2030 of the UN moving towards marxism?

    • avatar

      Guzt Flater Capitalism, marxism … people are always losing …

    • avatar

      Guzt Flater Capitalism, marxism … people are always losing …

    • avatar

      Carolus Den Haas ➡️Invest with the minimum you can afford and get your sure Profit ✅after 7days of trading ➡️Build your wealth and watch your money grow our investors profit is our ultimate concern Our world is our pride Transparency is our motto. Amber Amelia

    • avatar
      Nick Haines

      Exactly….as long as you don’t mean the sort of ‘participation’ we saw on 30’s Germany!

  9. avatar

    The il le gal EU doesn’t work :) GAME OVER

  10. avatar

    It s not working so badly.. Why do you want everybody to be equal? We are born unequal..

  11. avatar

    TINA (There Is No Alternative, the cry of the neoliberals) got busted by TAPAS (There Are Plenty of AlternativeS).

  12. avatar

    Progressive capitalism with social state is on the way back, neoliberal experiment failed in U.S. EU follow

  13. avatar

    not enough moneys: you can’t help everyone, can’t improve everything, can’t maintain or protect anythingAnd problems and need only grows

  14. avatar

    Depends on your definition of capitalism…

  15. avatar

    Le capitalisme est le meilleur système pour satisfaire pleinement 1% de la pop ,faire rêver 50 à 60 % qui n’arriveront jamais à faire partie de ces 1% ( c’est mathématique) mais qui vont y croire jusqu’au moment où ils vont crever et le reste a bien compris que ce n’était qu’un leurre pour tranquillou se faire des fortunes grâce au chantage à l’emploi et à ce sentiment d’envie de jalousie ,si cher à l’humain que l’on prend bien soins d’entretenir. Le capitalisme ne peut exister que s’il est croissant et à 2% annuel et en 1040 ans on a un PIB mondial qui devrait être multiplié par 1 000 000 000 .Etes vous sérieux??? La plus grande utopie que l’humain ait jamais adulé.

  16. avatar

    What is capitalism? Imho, it could be defined as ‘unlimited appropriation by individuals’. In that sense, it’s incompatible with physical limitations, as well as the anthropological need of reciprocity (or justice). It’s of course the best way to produce richness, but it is irrelevant to human needs.

  17. avatar

    Dreams come true when you work with them, everyone wants to be successful and you can succeed with a short time while sittings at home without sending money to anyone we received money through Bitcoin and we also send through Bitcoin, do you have a verified coinsph wallet or gcash??? message her to get started immediately Amber Amelia

  18. avatar

    21st century neo-lib capitalism boosted space flight development and now (NASA debacle) it freezes the return to the moon. Raw capitalism is like shooting in your own foot. Though old school capitalism (like in Europe) never brought a man to the moon. It’s the Chinese with governement driven capitalism that are building a spaceport midways taking their proteïne pills and putting their helmets on. Ground control? Major Tom?

  19. avatar

    Yes they are logical thinking mixed with social responsability and business oriented to create value for people not to increase income as much as possible with less possible spending on resources. We need to teach humanity basic values again of respect to people and nature and abandon chasing for money that are having value assigned by those in power

  20. avatar

    We haven’t tried capitalism, what we have now is corporate oligarchy.

  21. avatar

    Capitalism exists for 200 years which is 0.1% of history of Homo Sapiens. The answer is yes. There is an alternative. And not just one.

  22. avatar

    Capitalism can be good only if there is an altarnative on the table

  23. avatar

    Oh dear… when expertise is confused with amateurism when facing sharks.

  24. avatar

    The narcissistic clown, that in a few months almost destroyed his country, is now attempting to be heard an expert, so sad and so funny.

  25. avatar

    Listen to yianis. He almost destroyed Greece. Guaranteed success!!!!

  26. avatar

    Varoufakis, for sure did answer you:For sure and I, m the only one to know about it:it’s obvious: Super kapitalism on my own way…

  27. avatar

    There is ABSOLUTELY no alternatives to capitalism. Varoufakis knows this very well. Try to hire him for a speech and see how he takes FULL ADVANTAGE of the most beautiful market system. He promotes Marxism to the fools because of capitalism. If he was a true Marxist, he would do his speeches for free.

  28. avatar

    Samuel Dérosby-Tremblay the comments

  29. avatar

    Capitalism is our primitive jungle nature. Capitalism is not just a system it is an instinct. Of course you can not get over instincts but instincts can be tamed. How advanced must the human nature be to tame the jungle laws is another question. There is definitely an alternative to capitalism and that is the Chinese model of “governmental” capitalism. It is the most promising one nowadays but it just needs a bit of democratization.

    • avatar

      Man is not animal because we have the ability and to learn, and we have innate sympathy.

  30. avatar

    No better alternatives. But, today’s overregulated, hybrid economic system resembles capitalism, but it is not. The free market is not that free, economy is too planned. Human nature is more powerful than nurture. You can’t turn people into bleeding-heart, altruistic angels. We have two important instincts, to compete and to administer. The first one is more important on a societal level, the second is more important on a smaller, organizational level or in your family. Don’t let chaos rule your business or family, or centrally planned order rule your economy.

  31. avatar

    There are a lot of European countries which are “socialist” in nature.The big mistake is confusing “Democracy” and “Capitalism”. You ca not doing that, are you?

  32. avatar

    Capitalism as an socio-economic system exists for only 200 years which is exactly 0.1% of history of Homo Sapiens. Does this answer your question?It’s way better than its predecessor feudalism but still has many flaws. If people think deregulated capitalism in its pure form is the only economic system that works and don’t allow any debate on that topic, then we are talking about a neoliberal globalist dictatorship. And that’s not OK.

  33. avatar

    Of course there are alternatives: medieval-style serfdom, American-style plantations, Nazism, Soviet-style socialism and the like.

  34. avatar

    Yes! Stalinism, maoism, Khmer Rouge, Kim Jong Il… Stupid question!

  35. avatar

    In France we have the same organisation than China. Capitalism for economics, ‘communism for social and culture.

  36. avatar
    Nick Haines

    Does the problem lie with the political system, or with the public’s involvement with it? One might make claims for the success/failure of capitalism, a contributor points out that its reign has lasted for some 0.1% of humanities existence. It has to be noted that our experiment with socialism lasted for an even shorter period. Another contributor snarls about Khmer Rouge/Pol Pot and calls the question ‘stupid’. It isn’t, it’s a vitally important one. IF one accepts that capitalism will be the basis of western civilisation for the unforeseeable future, surely the question we should be asking is: ‘How do we mitigate its worst aspects and increase public political involvement?.’ If we look at how ‘democracy’ functions in the UK, the conclusion has to be, it doesn’t. How can it be right or fair for a party to claim any kind of mandate when they only command a third of the electorate’s approval? How on Earth could such a major decision such as Brexit be decided by such a narrow margin..AND be called a decisive victory? As far as I can see, the answer lies locally. Small initiatives that if/when they prove to be successful will naturally be adopted more widely. Local banks/saving schemes financing local projects that could be described as socialist and/or capitalist. If it works, that’s all that matters, surely? To my mind, calls to ‘overthrow the system’ are fanciful and for many an excuse for doing nothing. What I propose will take far more work. it may however make far more people feel they have some kind of control over their lives, that their existence matters.

  37. avatar
    Nick Haines

    One additional thought. The idea itself is quite old but I think it may have a future.
    Local currency. Money that can only be spent in one’s local community. It would be up to that community to decide just how local they wish to make it..a whole city, an area of a city, one village or several villages. People may remember the phrase ‘Not worth a brass farthing’. This dates from a time when the Crown allowed communities to mint their own low level currency to allow purchase of smaller, day yo day items but of no use out with the locale. IF we agree that money is power, this small move might return some power to the people.

  38. avatar

    We in the UK have companies who are Co-operatives. John Lewis. They do not run upon a capitalist ideology. They’re pretty successful. In fact, they’re more successful than companies run on Capitalism. They’re not like a dictatorship. Capitalism is supported by the right of politics. Hitler was on the far right. So, you are wrong. How can Capitalism be good when we have massive hikes and dips in inflation and financial crisises?

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