These days, we read disconcerting stories about how the world markets are either not performing and/or depressed or economies suffering or going through a recession. Whether or not it's a non performance and/or melt down or recession or indeed a depression usually depends on the economists' and/or journalists' paradigm.
Now, I don't have a problem with capitalism or those who believe in it but I believe capitalism is not a democracy friendly system. When for instance, some people interpret a glass with water, some would regard it as, "half empty" whilst others would call it, "half full" and yet it is the same glass of water.
These are merely semantics which do not detract from the fact that the glass has a liquid content that is not filled up to its capacity though. Why am I even raising this paradigm dilemma? It is because at the heart of and the root cause of the global economic meltdown and the rampaging debt crisis in the eurozone and elsewhere in the world is the failure of capitalism.
I recently read an article which was written by Andrew Kenny, an Engineer, wherein he praised capitalism as the best of the best in economic systems. This bold statement that, "it is the best economic system ever devised..." couldn't be further from the truth though, since on a daily basis reality proves otherwise.
I thus find this assertion disingenuous because the fact of the matter is that capitalism has failed and continues to fail in countries the world over. In fact the world is going through a recession right now and teetering on the brink of depression, thanks in large part to the capitalists and their greed inspired policies.
This greed for instance manifests in executives who milk the companies they are tasked with steering/ directing. They amass personal wealth and award themselves with generous share options plus bonuses, at the expense of the real owners of those businesses (i.e. shareholders) whom they in the process short change by not declaring a dividend to them. I can never understand a system that rewards the executives more than those who take risks by investing their funds.
The world's biggest economy, the US (or at least it was until capitalism collapsed it and saw China overtaking them) is a case in point. China, a communist state, is arguably the world's leading economy and the world is looking to it to help the global markets to turnaround. The US is today a socialist state which is dependent on government to not only stimulate the economy but also to rescue key industries.
With this background in mind, the recent announcement by Nicky Oppenheimer that his family will dispose of a 40% stake in De Beers for $5.1bn would have presented a perfect opportunity to our government to stake a claim and bid to acquire it. This would put the PPP concept to mining ownership to an acid test and in essence, becoming a solution to the raging debate on nationalisation.
I am thus suggesting here that our government and not Anglo American should buy to own this stake so that the state coffers can swell from returns. This country's citizenry would for the first time reap benefits from the rich mineral resources that have been plundered and exploited to the benefit of one family for a century.
The large capital injection by Obama's government administration in order to prevent a full scale recession is living proof and testimony to my contention. This American economic collapse is due to the glaring failures of capitalism and the resultant effects thereof in the same way that 20 years ago the USSR's economy and empire was collapsed by the failures of communism.
So where then do those people who still continue to dream and defend capitalism blindly get this notion that the successes of capitalism are unparalleled in the history of economic systems? The only logical explanation must be that these aspirant capitalists are in denial of the fact that the system they so fervently advocate for has let them down. Capitalism as an economic system is on its knees and it is a matter of time before most big economies turn to socialism as a solution.
In Europe, there is a debt crisis and Greece's economy has collapsed thanks again largely to capitalism and such like or inclined policies. The whole euro zone is in fact suffering because of capitalism and its failures which manifests inter alia in joblessness, increased income gap, increase in the number of people living below the poverty line and bankruptcy to name but a few drawbacks.
In my view, the only notable and/or favourable attributes of capitalism, apart from the laudable promotion of entrepreneurial vigour and free market fundamentals, is that capitalism rewards innovation, encourages risk taking and compensates those entrepreneurs with profit maximisation.
The element of greed that it is based on though in chasing those profits at all costs, back stabbing and double crossing business partners however far outweigh those positives. A classical example of this manifestation is what happened to the late Steve Jobs who started a technology company (i.e. Apple McIntosh) with a friend in his garage.
He invited this friend to assist him to run it with a view to take it to the next level but what happened instead, is that the company grew alright but this very trusted friend connived with the board to fire the owner (i.e. Jobs) much to his consternation.
If Jobs wasn't a go-getter and a born entrepreneur with a never say die attitude plus a spirit attuned to winning, he would have given up on his dreams but thankfully he persevered and soldiered on to form yet another successful company. So rapid and impressive was this second company's growth plus success that Apple seized the opportunity and bought it out.
They took over that operation within a few years and that is how Jobs found his way back to Apple after he had been out-muscled or left out in the cold by his dear friend. He came back to grow Apple into the success story that we know of it today which the envy of most IT companies.
Another case in point is Mark Zuckerberg of Facebook who started a company with his friend Eduardo Saverin. They both occupied executive positions of CEO and CFO respectively but again capitalism reared its ugly head when the company started growing rapidly. Zuckerberg, a nerd and computer boffin, who didn't have funds at inception connived with new partners to short change his friend from a 30% stake down to a 0.01% under the guise that he had invited new shareholders.
The strange part or irony is that in the midst of all that initiative of a so called necessary growth Zuckerberg's stake of 60% wasn't diluted. These are but two of many examples of how heartless capitalists are and one might argue that but they are good people. Others might say but they give back in the form of CSI (i.e. corporate social investment/responsibility) or they deserve it as compensation for the high risks they take in forming companies.
Of course risk takers should be richly rewarded but it doesn't then mean that they must be cut throat about their business dealings. Capitalism is flawed and anyone who thinks otherwise is in denial and it perceived success is a figment of the praise-singer's imagination.
My observation is that companies mainly or only use CSI as a ploy to evade tax rather than it being a genuine attempt to give back to the needy communities. There are of course exceptions to the rule and therefore I wouldn't want to tar everyone with the same brush lest I be seen to be dismissive. One shouldn't also be ungrateful for the genuine sacrifices which are made by corporates and that which have uplifted so many people from the abyss of poverty.
On that note I rest my case and with this assessment, I hope that South Africans won't be fooled and/or hoodwinked into believing disingenuous pieces which praise a heartless economic system and project it as the best thing that has ever happened since sliced bread when it has actually wrecked people's lives save for those greedy captains of industry. But of course these praise-singers are entitled to their opinions and/or to hold whatever views they deem fit about capitalism. This should not be done at the risk of misleading the nation though since those of us who know the truth have a duty to dispel these myths.
We will continually tell the world that both communism and capitalism have failed equally with the same catastrophic consequences in the lives of the poor. Until the poor can learn to stand up and fight an exploitative system which economically oppresses them, they will continue to play second fiddle and be regarded as the second economy.
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