This may sound like a foolish question, but isn’t failure a part of capitalism – not the end of capitalism?
Since the downturn of the economy, public anger towards corporations has grown quite noticeably. While the public should be, and has the right to be, angered at companies that accepted “emergency” funding, yet continued to pay out bonuses, there are a number of companies who are the target of public ire simply because they… well… are large and grouped into industries that are currently under stress.
A number of news commentators, politicians, and bloggers worldwide have made comments like:
“This is a failure of extreme capitalism” – Prime Minister Kevin Rudd
“These events are signposts in the historic failure of American and world capitalism” – Barry Gray
“Capitalism is a failure – what the bailout means for working people” - Workers International League
Yes, the world is in the throws of a severe economic recession. Individuals worldwide have witnessed their net worths shrink dramatically. Jobs, even for the most qualified of individuals, are hard to come by. Companies that managed to survive the great depression are now facing extinction.
Not to sound crass, but isn’t this all part of the cycle?
Think about the season cycle for a moment. You have spring and summer, providing a rebirth and growth period, followed by fall and winter, which leads to death and the void of life. The pulse of a capitalist society follows the same patter. Contraction and Expansion. The process helps remove the weakness, allowing for a stronger system to emerge on the other side.
In no way am I saying it is easy to experience this economic pain, it is not. While not unemployed, I have suffered financial losses greater than I had ever expected. Frankly, losses that will take 10 years to simply break even if the market were to turn today. Am I happy about this? No. If I wish to live in a capitalist society, these are the risks I have to accept. But, really, what other options exist?
Socialism – Look at the socialist leaning economies in the world and one will see the same economic hardship, if not more severe.
Communism – Distinctly different than Socialism, but also a political and economic failure.
But why do I want to live in a capitalist society? Flexibility. Hope. Possibility.
While I understand the difficulty facing anyone wishing to make a life in a capitalist society, I also know options and the possibility of success is less in a socialist or communist society. I’m not saying it’s perfect, it’s not, but it sure is better than the other options on the table as of right now.
Gordon Brown, the Prime Minister of the United Kingdom recently said “the economic crisis demonstrates the failure of laissez faire capitalism.”
Really?
Maybe the failure isn’t capitalism, maybe the failure is regulation and political intervention. Had political leaders truly paid attention to auditors several years ago, the collapse of Frannie and Freddie would have never happened. Instead, people simply were looking for how they could profit (financially and politically).
Should the public be pissed because 165 million in bonuses are being paid out by AIG? Damn right. Should there be a backlash about GM being “bailed out” while grossly mismanaging their business for decades on end? Yes. Should we be mad about that the government is handing blank checks to banks while not providing insight as to where the money is going. Yes. Should a company chastised simply because they are big? No. Should we over-regulate because of the current crisis? No. Should we declare capitalism dead? No.
The system can be, and should be, improved but we should not throw the baby out with the bathwater. The experiment known as the United States has been a resounding success, politically and economically, regardless of our downfalls thus far (and we’ve had many, many downfalls). Now is the time to evaluate what works, what doesn’t, and make the changes that are needed to continue growing.
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