Is Capitalism on the Way Out?

One of my message boards is engaged in a vigorous debate on the economy, especially the last week’s disastrous events (we haven’t begun feeling the effects yet, but we will soon).  One of the other posters–an avowed socialist–presented the following idea:

jonny_nowhere wrote:does anyone else think that may capitalism has had its day, with the rise of chinease economy and russia gaining massive new power based on its energy and natural resources, maybe we will not end up the “winners” of the cold war after all

My response was as follows:

While the Chinese did do some very intelligent things with central planning (such as choosing to limit their health expenditures to proactive measures like immunizations rather than more “Western” healthcare), their present economy is entirely dependent on ours. That’s one reason they’ve been buying up American debt to the tune of $700 billion a year–if we stop spending, their economy tanks, and a popular uprising could spell the end of the Communist party.

William Hutton, a British economist, has written an interesting and scary book (The Writing on the Wall) that may unfortunately prove prescient. He’s basically said a good deal of the Chinese economic success was built on a foundation of savings, which together with American consumerism and investment, leveraged development of their infrastructure. He also asserts that the explosive Chinese economic growth is entirely unsustainable–especially in light of a reduction in U.S. spending.

As for Russia, their present “economic strategy” is ominously leaning towards the aggressive Japanese policies of WWII, with threats of military force if anyone else tries to access the natural gas and oil in the Arctic. That’s bad economic policy for the entire world, as everyone has a vested interest in avoiding energy shortages, and keeping fuel costs low, and the Russians do not have the industrial capacity to provide that by themselves.

Russia’s economy is presently in the sh*tcan anyway. Heck, they’re practically selling off the babies in their orphanages, things are so bad (I know people who’ve adopted four Russian children in the last few years).

Capitalism is still the best system in the world, and it alone (with the free and open exchange of information) has the opportunity to leverage the incredible potential of the human person in the digital age. We need to be using the wealth of information and inexpensive training (technical and otherwise) offered by the internet to develop the minds of millions in the developing world. Triple and quadruple the numbers of skilled engineers, scientists, etc., and taking on the world’s present problems would be cake.

Knowledge is power, and socialist systems that restrict the flow of ideas and information–as the Chinese and Russians are doing with citizens internet access–can never be as fully innovative and productive as a comparable capitalist society.

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One Response to “Is Capitalism on the Way Out?”

  1. Stuart Says:

    There’s more to it than that. China’s success has come almost entirely because they’ve been incrementally allowing MORE CAPITALISM. That was the big deal in recent decades, that a Communist power had learned that a central economy didn’t work and that in order to become wealthy, they had to turn capitalist–but they wanted to do so and still retain their iron grip on the government. Their wealth is also heavily boosted by Hong Kong, which was made extremely prosperous by the Brits before China took it over a few years back. As for the savings rate, that’s one of the things that helped make Japan successful, too, and something that would help our country immensely if we can get off our addiction to debt.

    As for Russia, it seeks to become another Oil-Spigot Dictatorship just like Saudi Arabia and Iran. That’s the only hope they have right now for shoring up their economy because it was so thoroughly wrecked by Communism that it hasn’t recovered even after two decades. They corrupted two generations with Communism to such an extent that the people don’t know how to make capitalism work. Do we really want to destroy our own generations in the same way by teaching them that the government can solve all their problems, bail them out of any bad situation, and pander to their every desire for entitlements?


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