Losing faith in capitalism
At the beginning of the coronavirus outbreak, the World Economic Forum shared on Twitter a study conducted by Statista, a German online portal for statistics. It listed the top 10 countries where people are losing faith in capitalism, where people agree ‘capitalism as it exists today does more harm than good in the world’. Interestingly, India tops the chart, with 74% respondents agreeing, followed by France (69%), China (63%), and Brazil (57%). Germany trails with 55%, the UK (53%), and with Canada and the US at 47% each.
The declining faith in capitalism comes at a time when Oxfam International, in its annual presentation timed a few days before the World Economic Forum meeting in January at Davos, presented the shocking report on income inequality. Accordingly, India’s richest 1% carries four times more wealth than the combined wealth of the bottom 70%. Internationally, the report says 2,153 billionaires have more wealth than 60% of the global population. Ironically, the same wealthy corporations are once again on the forefront seeking massive Covid-19 bailouts. Such bailouts over the period have helped shape the popular thinking that global economic system, in reality, supports ‘socialism for corporate, and capitalism for the poor’. The worsening income inequality, which is increasingly coming under the scanner, is enough to fuel growing dissatisfaction with capitalism. The pandemic has further widened the social and economic gulf.
Despite market reforms being pursued aggressively over the past four decades, one better way to understand how the social and economic disparities have only widened, comes from an insightful analysis of growing food insecurity, and that too at a time of plenty. Writing in the New York Times, Patricia Cohen compares the long queues for food in the US to the time of the Great Depression in the 1930s with the still longer queues of cars, stretching to several miles, before food banks during the 2020 pandemic. Separated by a gap of almost 80 to 90 years, a memorable picture taken by photographer Margaret Bourke-White shows a long line of poor citizens waiting for relief below a signboard showing a happy family in a car, with the banner claiming: ‘World’s highest standard of living’.
Nothing much seems to have changed. The economic model of growth has only made the rich richer, and the poor have been driven against the wall. In a country, which is known to be the world’s richest economy, pictures of cars lined up for an average of 2 miles or so before a food bank, is only a stark reflection of ‘profound, long-standing vulnerabilities in the economic system’. Not only in the US, the distressing visuals of traumatised migrant workers in India, with children in laps and carrying family belongings on head, trudging on foot to reach their homes several hundred kilometres away, will continue to haunt the nation. A serious rethink is now required to radically overhaul the economic system, bringing in equity and justice at the centre of human development.
It doesn’t end here. Four decades of neoliberal economics has also unleashed an environmental havoc. With temperatures soaring, ice caps melting and greenhouse gas emissions (GHGs) rising, climate change is no longer a distant reality. Many believe that the destruction of prime natural resources, forests and biodiversity hotspots has led to the emergence of deadly diseases. A complex web of relationship exists between industrial farming, factory farms and bushmeat markets calling for an immediate fixing of the broken food systems so as to avoid the next pandemic. Whether it is the resulting environment destruction or the rampaging economic inequalities, the Covid crisis should act as an urgent wake-up call for governments to move towards an economic system where the majority population is not deprived of basic necessities, where the emphasis shifts from economic growth to the economics of well-being, where Gandhi’s talisman becomes the new development mantra.
PM Modi recently stressed on ‘self-reliance’. Although several newspaper editorials and articles have warned against returning to self-reliance, and that too at a time when the world needs to quickly move into a trajectory of high growth, I think what the PM said is exactly what the country needs. Not only making villages self-reliant, where agriculture becomes the pivot for rebooting the Indian economy, the policy imperative has to swing to creating adequate farm, public health and education infrastructure, thereby revitalising the rural economy. This has to be accompanied by a renewed emphasis on ‘Make in India’ programme — especially by revitalising the MSME sector — given that too much dependence on global value chains is now coming on the radar.
The principle of self-reliance is based on according dignity to labour and living in harmony with nature. These two underlying principles for economic well-being come in direct conflict with traditional economics which continues to harp on productivity and growth, pushing for more aggressive market reforms. The bumpy road ahead, however, will need a clear-cut change in policy direction, where first providing a generous social security net for the unskilled as well as skilled industrial workers becomes an immediate necessity. Secondly, the focus has to shift from destroying nature in the quest for economic growth.
Staying indoors for several weeks has made people realise the importance of conserving environment. They now need appropriate policies that make it possible. Economic well-being is an idea whose time has come.
