Alternative to capitalism

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Bishop 2000 has defined capitalism as the modern, market-oriented, commodity-producing economic system controlled by ‘capital’, that is, purchasing-power used to hire labour for wages. The term was first used prominently, and pejoratively, by Perelman 2000, but for defenders of the system it has become a term of praise (Bishop, 2000). The question whether it is morally permissible for the state to execute any of its citizens and, if so, under what circumstances, has been debated by philosophers, sociologist, and politicians ever since (Aslund, 2007). The paper discuses the reasons why economists, theoreticians and politicians argue that there is no alternative to capitalism. The principal arguments in their favor are illustrated. The paper ends with the reasons why I agree that capitalism do not have an alternative (Bowles, 2007).

If what is crumbling in the East is the only possible alternative to capitalism, as many people believe, then trying to develop different economic vision is futile. On the other hand, if what is crumbling is only one horribly flawed alternative to capitalism, as minorities of critics have been claiming, trying to find a superior alternative makes sense (Eyal, Szelenyi, & Townsley, 2000).

Bishop 2000 (p. 46) sees the origin of capitalism in the forcible expropriation of European peasants and small artisan during the later Middle Age, leading to a separation amid the bourgeoisie or capital class, who privately own the means of production, and the proletarians, can live only by selling their labour powers to members of the bourgeoisie. “Ownership of the means of production gives the bourgeoisie a decisive bargaining advantage over the proletariat, which shows itself in the form of the profit and interest on capital, resulting from the exploitation of wage labor” (Nee & Svedberg, 2008, p. 102). One central claim of Milton Friedman is that capitalism has been responsible for a colossal growth in humanity’s productive capabilities. Another is that capitalism has an inherent tendency to accumulate, concentrate social power in the hands of the capitalist class and bringing the explored working class more and more under its economic domination (Downing, 2007). The potential for a higher society and a better life which capitalism has made possible can be realized for the vats majority only if the workers are emancipated from the domination of capital.

Defenders of capitalism deny that the charge that wage laborers are exploited, citing the indispensable economic functions performed by capitalist, such as managerial and supervisory labour, saving, and the assumption of risks. Critics of capitalism respond that in principle there is no reas9n why these functions must be performed by capitalist (Braithwaite, 2008). Workers need not be supervised by those who represent interest antagonistic to theirs: capitalist typically bear fewer burden of deprivation than workers do for the sake of social saving, and if capitalists are rewarded for risk-taking, the system offers no similar rewards to workers, who nevertheless risk losing their livelihood when an enterprise fails. They see capitalists as ‘reward’ for performing greater control over production, saving, and risk-taking, hence putting them in a position to reap the fruits of economic co-operation, accumulation, and good fortune. Profit and interest on capital are not rewards for managing, saving, and risk-taking, but rather consequences of capital’s social power to exploit labor (Perelman, 2000). To these defenders, I and maybe you reply that the failure of the Soviet system reveals capitalism to be the most efficient way yet discovered to mange a modern economic system. “To grant this point, however, is not in the least to concede that capitalism is not exploitative, only that we have yet top find an efficient modern economic system which does not exploit workers” (Nee & Svedberg, 2008, p. 102). “It is doubtless as a troubling fact that we have not, but this fact provides us with no reason for feeling any loyalty to the capitalism system and leaves untouched the basic reason to seek an alternative to capitalism” (Bowles, 2007, p.08).

Exchange for capitalism is truly charitable only when almost equivalent alternative exists. “Monopoly implies the absence of alternative and thereby inhibits effective freedom of exchange. In practice, monopoly (as brought about by capitalism) frequently, if not generally, arises from government support or from collusive agreements among individuals,” (Braithwaite, 2008, p. 09). With respect to these, the problem is either to avid governmental fostering such as those embodied in our anti-trust laws. “However, monopoly may also arise because it is technically efficient to have a single producer or enterprise,” (Downing, 2007, p. 13).

When technical conditions make a monopoly the natural outcome of competitive market forces, there are only three alternatives that seem to be available: private monopoly, public monopoly, or public regulation. “All three are bad so we must choose among evils,” Eyal et al. 2000, (p 25), observing public regulation of monopoly in the United States, found the result so distasteful that he concluded public monopoly (hence capitalism) is less evil. Perelman 2000 a noted German liberal observing public monopoly in German railroads, found the result also found distasteful that he concluded public regulation would be lesser evil. Of society were static so that the conditions which give rise to a technical monopoly and hence capitalism were sure to remain, I would have little confidence in this solution (Perelman, 2000, p. 29). In a rapidly changing society, however, the condition making for technical monopoly frequently change and I suspect that both public regulation and public monopoly are likely to be less responsive to such changes in conditions, to be less readily capable of elimination, than private monopoly.

The simplest approach to definition of capitalism to that of political freedom, in terms of the absence of coercion, particularly (but not exclusively) the coercion of the centralized state. Capitalism in this context is characterized by the existence of alternatives (Aslund, 2007, p.45). As soon as alternatives exist, there can be no coercion simple competition among close options which are independent implies choice and subsequently a minimization of cost to the individual involved (Bowles, 2007, p.08).

The ‘range of choice’ freedom is the concept usually employed by economists since most easily fit their framework of analysis. Other definitions have been used in different contexts however. These assumptions are crucial to the analysis since all that is contained in Capitalism and freedom can be related and explained in terms of them (Downing, 2007, p. 13). The immediate corollary is that the interactions of free individual results in an optimal situation for society. According to Braithwaite 2008 for example, no one can be made better off without making at least one other individual worse off. Of course, the claims are true and furthermore. Monopoly and capitalism are created by us. I therefore fully agree that capitalism cannot be terminated.

Bibliography

Aslund, A. (2007). How capitalism was built: The transformation of Central and Eastern

Europe, Russia, and Central Asia. Cambridge University Press Publishers.

Bishop, J. D. (2000). Ethics and capitalism. University of Toronto Press Publishers, NY.

Bowles, P. (2007). Capitalism. New York. Pearson/Longman Publisher.

Braithwaite, J. (2008). Regulatory capitalism: how it works, ideas for making it work better.

New York. Edward Elgar Publishing Publisher.

Downing, D. (2007). Capitalism. Washington DC. Heinemann Publisher.

Eyal, G. Szelenyi. I., & Townsley, E. (2000). Making capitalism without capitalists: Class

formation and elite struggles in post-communist Central Europe. New York. Verso Publisher.

Nee, V. & Svedberg, R. (2008). On capitalism. New York. Stanford University Press Publisher.

Perelman, M. (2000). The invention of capitalism: classical political economy and the secret

history of primitive accumulation. New York. Publisher, Duke University Press.