By Dulanjali Mihindukulasuriya ,Psychology Major student at ANC Education
I will not attempt to defend the endless white collar crimes committed by capitalists, but I will justify the principles of the economic system called capitalism, and I will do so with due reason. Contrary to popular belief, capitalism is good for society.
I feel it is a timely issue to focus on because we young people are the future of this country. We will be the investors, the workforce, the corporate sector, the main capital this country's economy will depend on. And justice can be done to this nation only if we take well informed decisions and implement the wisest courses of action. I want you to absorb the facts I present, and you will realize that even Sri Lanka's economy can benefit greatly from capitalism.
In layman's terms, capitalism is an economic system in which the means of production are mostly owned by private individuals. In a capitalist economy the government plays a very small role in the market system. Compared to a planned economy, advocated mostly by socialists, capitalists believe in the spirit of a "free" economy and "free" enterprises. A capitalist is anyone who invests capital; this could be in the form of ready cash, infrastructure, intelligence, or special skills-of course, with the intention of earning profits. Therefore, even you and I can be capitalists. The faults pinned to capitalism are numerous and its negative connotations are grave. However, a careful examination will reveal that the accusations are based more on hasty conclusions than on logically derived facts.
First accusation: Republican governments in the U.S. have been blamed for tax cuts to capitalists who are already millionaires. For example, Mario Cuomo does so in his 1984 Democratic convention speech. However, such tax cuts are justifiable because, if the capitalists get more tax cuts, they will invest more, and if there is more investment, then more production and more employment are possible.
Capitalism is also thought to be the culprit behind high unemployment rates in the United States. But if it is cheaper to import foreign goods and services is it not logical to do so?
Since Republicans and capitalists supposedly responsible for unemployment rates are the minority in the US Congress, you would expect the in-power Democratic president's 2008 stimulus package to lower unemployment rates. But no, according to the US Bureau of Labour Statistics, it has had no effect on an increasing unemployment rate.
Capitalism is thought to be the main perpetrator of the massive trade deficit of the United States, but according to the US Census Bureau, the trade deficit and the GDP are positively correlated-every time the trade deficit increases, the GDP rises and the economy grows. Besides, America is a country driven by high demand for imported goods, making a trade deficit inevitable.
China still depends on private investors and an open market to spur on its economy, despite being communist. Yet China's trade balance is positive. So, capitalism can't be to blame for free market operations that promote awesome possibilities. Furthermore, opponents of capitalism call it the villain behind extensive pollution. But capitalism counteracts this allegation by evolving to include yet another facet called "natural capitalism". This is where renewable and non-renewable resources of nature are managed with added efficiency. In defence of capitalism, I say that environmental pollution is caused every time humans interact with nature. Just take a look at Russia and Poland where communism treated nature far worse than capitalism ever did.
However, I would be biased if I didn't explore the downside of capitalism. Of course, just like any other system that man has created even capitalism could turn dysfunctional and corrupted. Cases in point are the Enron scandal and the "Dead Peasant Policy", where large companies took out health insurances on their employees but are the sole beneficiary in case of employee deaths. But this is precisely why we have laws and a justice system, to maintain civility and morals, to uphold justice and protect the rights of the people.
Now let's talk about benefits of capitalism. It promotes competition that humans thrive on, and it maintains and increases product quality. Capitalism is the driving force behind entrepreneurship, fulfilling individual ambitions through hard work and smart thinking. Capitalism creates more needs, thereby widening horizons of markets and increasing customer bases. Capitalism is responsible for creating jobs and hence alleviating poverty. It is capitalism that enables investment in research for innovative technology: stem cell therapy, ipods, and cosmetic surgery are a few examples. You name it; capitalism invents it.
International trade is possible because of capitalism. Places like ANC, ACBT, IIHE and SLIIT-all local institutions that offer degrees with affiliations to foreign universities- are possible because businessmen invested their capital in these institutions.
I hope you understand, just as I have, that capitalism isn't really bad. Investing your monetary and mental assets with morally justified ambition, and working hard to make it big, is not a crime. So go on, be ambitious, get creative, persevere in attaining your goals, and remember: healthy competition never hurt anyone, work hard to be successful. That is the spirit of capitalism.
The employment situation - October 2009 [PDF document]. Retrieved from U.S. Bureau of Labour Staistics Web site: http://www.bls.gov/news.release/pdf/empsit.pdf
Environment: communist pollution. (1970, November 30). Time. Retrieved November 17, 2009, from http://www.time.com/time/magazine/article/0,9171,904549-1,00.html
Goodman, P. S. (2005, August 25). China to allow more stock sales. The Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2005/08/24/AR2005082402246.html
U.S trade in international goods and services [PDF document]. Retrieved from U.S Census Bureau Web site: http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
Weston, L. P. (n.d.). Does your boss want you dead?. Retrieved from http://moneycentral.msn.com/content/Insurance/P64954.asp