A Study Of The Underlying Assumptions of Contemporary Capitalism

By: Stephen Ainsah-Mensah

There is, perhaps, a growing feeling of excitement about the wonders bestowed on civilization by capitalism; but there is also a growing feeling of resentment about the inequalities that capitalism generates between the rich and the poor. Thus, one is confronted with the question: what is the best economic paradigm? So far, no particular absolute paradigm rules except to say that capitalism prevails when compared to others, at least in contemporary times. Absolute capitalism appears impractical, so that socialistic principles are often applied as an adjunct. But what is it that is so striking about capitalism that it tends to appeal better to the conscience of believers of liberty than differing economic paradigms? The obvious answer is that capitalism is thought to be the most consistent with the freedom of the person, the kind of freedom that the individual wills or is inclined to will. The principles of capitalism further advance the notion that since you and everyone else is free, it is clear that the freedom to deliberate and put into practice one’s ideas brings forth the best in each person, thus enabling the collective economic development of the society to reach an astounding level. One cannot doubt these contentions. The problem, however, is that they are too general and do not explain in some details the practical implications of freedom in connection with social and economic affairs.

Take for instance Mary. She wants to do things in her own way without the watchful restraints of the system. She thinks she could gain personal satisfaction from speaking her mind out on things that matter to her. She wants to join a religious denomination of her own choice as well as any social or political club that appeals to her. Mary has been able to actualize these wishes, but she is increasingly dissatisfied about her economic and social status and has grown to be wary about the system. She thinks despite all the freedom, her living standard is shameful. In fact, Mary cannot afford to pay her medical bills, nor can she afford to pay for quality education to enable her better her chances of getting a skilled job. Even living in a roomy home with her two kids is a problem. She just does not have the money to own her own home and must continue to rent a low-cost, two-bedroom apartment in a poor neighbourhood infested with drugs and prostitution. But why are there drugs and prostitution in Mary’s neighbourhood? One must admit that capitalism has brought incredible comfort and advancement to a lot of people’s lives, but others are left out of this wellbeing and have to find any means necessary to live including using the route of selling drugs and engaging in prostitution to acquire money.

While such activities are morally and socially objectionable, they hint that a person’s failings need urgent solutions, especially through the intervention of authorities without which his/her relapse into unworthy deeds may get more real than fictional. Hence, advocates of capitalism that are fond of claiming that a free person implies that governments should not interfere in the freedom of the person need to revise their position to incorporate the point that freedom is useless if a person does not have the ability to be economically free. And this is why a reasonable welfare system ought to be in place to assist those who lack economic freedom, so that they do not pose unwarranted disruptions to the social and moral character of the society. But to sustain an economically deprived person on welfare for an unusually long time tends to make that person addictive to welfare. That is why case workers for welfare clients ought to do everything necessary to enable recipients to unearth their creative potentials, so that their contributions to the society do not get held back. Besides these domestic problems about capitalism, there is another aspect of it, which is even more pronounced in terms of the problems it generates. This is international capitalism.

There is some kind of contradictoriness about capitalism whenever it makes firm inroads in the international field and brings to the fore the notion of developed and developing cultures. At this stage, it looks like developed and developing cultures are unable to coexist. How does one justify the severe inequality between developed and developing cultures if the purpose of capitalism is to promote personal freedom as well as advance personal capacities and talents? Why is it that the incidence of rich and poor in relation to capitalism is getting progressively accentuated? What is going wrong? The contradictoriness, previously stated, is of the form: to be developed, there is the need for others to be undeveloped; and this is the illustration.

I come from culture T, which is developed. In my culture, all kinds of hi-tech products are massively produced, and a major component of my culture’s development is from this perspective. But how can my culture sustain or increase its level of development if the hi-tech products are not sold to other cultures in increasing quantities? It also goes without saying that if other cultures should develop in a similar vein, then it would be difficult to sell the hi-tech products in my culture, and the level of development will fall, deteriorate.

This succinct illustration, of the relationship between developed and developing cultures, explains the continual perpetuation of the unevenness in development. The contradictoriness is evident in the statement that to be developed, others ought not to be developed. For my culture to be developed, other cultures ought not to be developed. But if other cultures ought not to be developed, then capacities and talents are wasted, and the economic freedom of a large class of people gets debased. The underlying principle of capitalism, which is that each individual should have the freedom to advance his/her position in life through the unobstructed urge to develop, needs a further new look following the new crusade of Free Trade. Free trade has further hampered others from coming out of the shell of underdevelopment. Once again, free trade yields to the principle of contradictoriness: for developed cultures to be free (in the region of trade), developing cultures ought not to be free. For developed cultures to be free in selling their products, developing cultures ought not to be free in producing similar products and selling them.

Finally, the freedom couched in the principles of capitalism does not explain precisely the magnitude of freedom. Who has more freedom, the rich or the poor? How does one exercise effective freedom when one is poor and hungry? Who determines the limits of freedom or its overuse? The freedom in capitalism is great but it also proves to be abstract in many respects. Contemporary capitalism needs to be freed from the scourge of unequal development. If this goal is attained, it would bring the benefits of moral, social and economic decency to all corners of the world. At that point, everyone would be proud to say: we are all equal in one world!