New Economy 2015: The Future of Capitalism
[SPECIAL SERIES PART 1 of 3] Without growth, capitalism is rendered no more, and possibly less effective than socialism as the U.S continues to slip down global quality of life indexes.
2015 will be extremely challenging for those still mired in third dimensional economics, but for the rest of us, new opportunities abound everywhere we turn. Just like we’ve always been the ones we’ve been waiting for, so too, are we the ones who will self-fund the new economy with our own capital, volunteerism and gifting. This is incredibly good news as we step into our power as sovereign beings acting under our own authority in service of all humanity. So that this good news doesn’t seem like more pie in the sky, let’s take a look back, and then move forward, to see a glimpse of what our future contains. How you write your future is up to you, but as you will see, the power of a new economy has been quietly at work behind the scenes for a while in surprising ways, waiting for the appropriate time to come into the spotlight. New reports and studies continue to provide quantifiable data that capitalism is in trouble. Income inequality and the damage it inflicts is back in the news with the recent paper by The Organisation for Economic Co-operation and Development (OECD), Trends in Income Inequality and its Impact on Economic Growth. OECD summarizes by stating, “Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand over the past two decades up to the Great Recession. In Italy, the United Kingdom and the United States, the cumulative growth rate would have been six to nine percentage points higher had income disparities not widened...” Though OECD cites that, “...the main mechanism through which inequality affects growth is by undermining education opportunities for children from poor socio-economic backgrounds, lowering social mobility and hampering skills development,” the root cause of inequality itself is an economic system that fails to deliver the equal opportunity it promises due to its own inherent limitations. Outside of policy induced bubbles, for most people, capitalism is only slightly better than other economic systems and less so when met with its kryptonite. But, before we get to that, let’s examine capitalism’s beginnings. Capitalism flourished in the beginning largely due to and literally off the backs of slaves.
The American South was reluctant to end slavery primarily due to economic reasons, but need not have worried as the economic forces of capitalism went to work with a national and global population explosion. Currently, many countries are hitting peak population, in that fertility rates are below replacement level. Though this should be good news, it’s only good if consumption continues to rise. Growth is the key ingredient to the continued viability of capitalism as a premier economic system. Capitalism’s kryptonite, stagnation, means capital is taken out of circulation to service debt and becomes concentrated in the hands of the few. Let’s qualify the following by stating that to build a better world, it must be recognized that there is no singular panacea to handle all human needs except a gift economy, a concept too far-reaching for most of humanity. Regardless, a shift in how we do business is being called for. Are you up for the challenge? The truth is capitalism does not benefit everyone to the extent it should.
The reason capitalism is only a slightly better economic system, even when running at peak performance, is that profligate materialism comes at the expense of our planet. We should not be poisoning our planet with material excess and the processes used to create it. Poverty levels should not exist and/or be rising to such levels in this stage of the game. Infrastructure and standards of living should not be in a state of decline.
The last thirty years have proven that trickle-down economics mostly trickles down to a very few. So, what’s wrong? One of the three core elements of capitalism is competition. Capitalism is a limited bi-polar construct in that it requires a loser for every winner. This is the true trickle-down effect as a large portion of the working class struggles for basic housing and to put food on the table, aided and abetted by the watering down of capitalism as we outsource labor to non-capitalistic countries, becoming complicit in human rights violations by those willing to turn a blind eye. Too many people, even in this country, are struggling for access to basic shelter, food, water, healthcare and higher education. Competition has wrought enough damage to each other and the planet, creating parasitic-type conditions that have made true innovation that could easily end man-made poverty extremely limited. World peace will forever remain elusive as long as we battle to secure our own survival, blind to the realization that our neighbor’s well-being is vital to our own. As a species, we are interconnected and inseparable from each other and from our ecosystem.
The greater truth that no mainstream economist has dared state publicly is that capitalism is not sustainable. Instead of debating outdated economics, let us come together to forge a new path—one that is practical and truly provides equal opportunity for all, even those desiring to live a simple life. Capitalism served us well, but it’s become evident that working together cooperatively rather than in competition is the foundation for a new economy and peaceful world. How about a trickle-up economy? Join us for part 2 of 3 for some great news for 2015! Photo credit: Tony Hall .
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