FOR Capitalism

AGAINST Capitalism

INNOVATION AND PROGRESS

In order to successfully attract and retain customers for their goods and services, companies in capitalist societies constantly have to think about how they can improve and innovate. This is particularly important in capitalist societies, as companies face tough competition in a free market economy, and therefore need to set themselves and their products apart from alternatives offered by other companies. This constant need to improve has no doubt driven innovation and progress in Europe and around the world. Think, for example, about how much technology has changed over the course of your lifetime.

PROFIT OVER PEOPLE

Critics argue that, under capitalism, society is split into two groups: the capitalists, who own the means of production, such as factories or companies, and workers, who sell their labour to capitalists and keep the economy running. Capitalists make money based on the labour force of the workers. Since capitalists own and run the company, they get to decide what to do with the money earned with workers’ labour – and get to keep a significant portion of what the worker produces as profit. To put it bluntly, capitalists exploit the labour value from their workers to fill their own pockets. In capitalism, only companies that make a profit can survive, or they will lose market share to competitors. This means that profit – not workers’ rights or welfare – becomes the most important concern for capitalists.

OVER A BILLION LIFTED OUT OF POVERTY

We should not forget that, just a few short generations ago, the majority of people (even in the richest countries) lived in extreme poverty. Let’s not compare capitalism to some imaginary system of wealth redistribution. Let’s look at the historical record. According to the World Bank, over a billion people have been lifted out of extreme poverty (defined as living on less than $1.90 a day) since 1990. No other economic system has been able to achieve such impressive results when it comes to poverty reduction. Only capitalism has a proven track record of materially improving living standards for so many people in such a short space of time.

KILLING THE PLANET

Climate change, biodiversity loss and plastic pollution – these are some of the biggest environmental threats facing the world today, and capitalism has played a huge part in creating all of them. Why? Capitalism is built on the premise of infinite growth, yet we live on a planet of finite resources. And the depletion of natural resources has devastating effects for our environment – the best example for this is perhaps the Amazon rainforest. For decades the world’s “green lung” has been exploited as a business venture, with wood being used for paper production, and large forest areas being cleared for commercial agriculture. This large-scale deforestation (in 2018 it was estimated that 17% of the forest has already been destroyed) means that less carbon can be absorbed – while at the same time carbon emissions and consumption across the world are rising.

THE ALTERNATIVES HAVE FAILED

At its heart, the Cold War was a battle between ideologies: capitalism versus communism. While the USA and its Western allies promoted free markets, the Soviets imposed central planning and command economies in their sphere of influence. Yet, while nearly all communist regimes collapsed in the 1990s, capitalism emerged as the ideological winner of the Cold War. Henceforth, capitalism was embraced as the economic model in all post-communist societies in Central and Eastern Europe, with citizens keen to leave the repression and human rights abuses of their former communist regimes behind. Nowadays, capitalism is the most widespread economic model worldwide.

INEQUALITY

In a capitalist system, the rich get richer while the poor stay poor. That is because rich people, who potentially already have profitable assets (or the means to purchase them), have a significant competitive advantage over those who start out with nothing. And as rich people are finding ways to increase their profits and become even wealthier, poorer people cannot catch up because their annual earnings often only just cover the bare essentials. This leads to increasing inequality within and between societies globally. To cut costs as much as possible, companies under capitalism move their production where it’s cheapest – even if that means moving it to the other side of the world. This means that people in rich countries may be able to buy more for their money and improve their standard of living. However, the “cheap labour” in developing countries often suffer appalling working and living conditions.

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