Why Did Capitalism Fail?

August 19, 2011

Why Did Capitalism Fail?

Posted: 8/19/11 09:50 AM ET - Huffington Post

Bob Burnett
Berkeley writer, retired Silicon Valley executive

We live in interesting times. The global economy is splintering. U.S. voters hate all politicians and there's political unrest throughout the world. The root cause of this turmoil is the failure of the dominant economic paradigm -- global corporate capitalism.

The modern world is ruled by multinational corporations and governed by a capitalistic ideology that believes: Corporations are a special breed of people, motivated solely by self-interest. Corporations seek to maximize return on capital by leveraging productivity and paying the least possible amount for taxes and labor. Corporate executives pledge allegiance to their directors and shareholders. The dominant corporate perspective is short term, the current financial quarter, and the dominant corporate ethic is greed, doing whatever it takes to maximize profit.

Five factors are responsible for the failure of global corporate capitalism. First, global corporations are too big. We're living in the age of corporate dinosaurs. (The largest multinational is JP Morgan Chase with assets of $2 Trillion, 240,000 employees, and offices in 100 countries.) The original dinosaurs perished because their huge bodies possessed tiny brains. Modern dinosaurs are failing because their massive bureaucracies possess miniscule hearts.

Since the Reagan era global corporations have followed the path of least resistance to profit; they've swallowed up their competitors and created monopolies, which have produced humongous bureaucracies. In the short-term, scale helps corporations grow profitable, but in the long-term it makes them inflexible and difficult to manage. Gigantism creates a culture where workers are encouraged to take enormous risks in order to create greater profits; it's based upon the notion that the corporation is "too big to fail."

Second, global corporations disdain civil society. They've created a culture of organizational narcissism, where workers pledge allegiance to the enterprise. Corporate employees live in a bubble, where they log obscene hours and then vacation with their co-workers.

Multinationals develop their own code of ethics and worldview separate from that of any national state. Corporate executives don't care about the success or failure of any particular country, only the growth and profitability of their global corporation. (Many large corporations pay no U.S. income tax; in 2009 Exxon Mobil actually got a $156 M rebate.)

Third, global corporations are modern outlaws, living outside the law. There is no invisible hand that regulates multinationals. In 1759 Philosopher Adam Smith argued that while wealthy individuals and corporations were motivated by self interest, an "invisible hand" was operating in the background ensuring that capitalist activities ultimately benefited society. In modern times this concept became the basis for the pronouncements of the Chicago School of Economics that markets were inherently self regulating. However, the last five years have demonstrated that there is no "invisible hand" -- unregulated markets have spelled disaster for the average person. The "recovery" of 2009-10 ensured that "too big to fail" institutions would survive and the rich would continue to be rich. Meanwhile millions of good jobs were either eliminated or replaced by low-wage jobs with poor or no benefits.

Fourth, global corporations are ruining our natural capital. Four of the top 10 multinational corporations are energy companies, with Exxon Mobil leading the list. But there are many indications that our oil reserves are gone. Meanwhile, other forms of natural capital have been depleted -- arable land, water, minerals, forests, fish, and so forth. Multinational corporations have treated the environment as a free resource. When the timberlands of North America began to be depleted, lumber corporations moved to South America and then Asia. Now, the "easy pickings" are gone. Global corporations have ravished the world and citizens of every nation live with the consequences: dirty air, foul water, and pollution of every sort.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/people-and-opinion/36687-why-did-capitalism-fail.html

Fifth, global corporations have angered the world community. The world GDP is $63 Trillion but multinational corporations garner a disproportionate share -- with banks accounting for an estimated $4 trillion (bank assets are $100 trillion). Global black markets make $2 trillion -- illegal drugs account for at least $300 billion. In many parts of the world, a worker is not able to earn a living wage, have a bank account or drive a car, but can always obtain drugs, sex, and weapons. And while the world may not be one big village in terms of lifestyle, it shares an image of "the good life" that's proffered in movies, TV, and the Internet. That's what teenagers in Afghanistan have in common with teenagers in England; they've been fed the same image of success in the global community and they know it's inaccessible. They are angry and, ultimately, their anger has the same target -- multinational corporations (and the governments that support them).
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687

We live in interesting times. The good news is we're witnessing the failure of global corporate capitalism. The bad news is we don't know what will replace it.

source: http://www.huffingtonpost.com/bob-bu...ml?ir=Politics

 
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See the writing of Karl Marx, he predicts all this stuff. Capitalism relies on self interest rather than the interest of the collective therin is the problem.

Nanak would say Capitalism realise Moh and Lobh therefore is doomed to fail!!

I am sorry to say but capitaisml has not failed.The article is only dealing with american crisis and not the entire world.USA became super power because of capitalism,China whose forefathers came into power by promising a communist society adopted capitalist methods and now China is super power .India which was on its way to bankruptcy in 1991 is now one of the largest growing economy because of capitalism

Its COMMUNISM that has FAILED and most miserably too...But ask the Indian variety KAMRADE...and he will point his finger to Moscow and say..hallelujah !!
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687
Once harkishan Surjeet hte leading Indian kamrade was seen emerging out of his house in clear weather crrying a large umbrella...why that chhatree ji.its perfect blue sky here in Delhi...a reporter asked him..OH...surjeet replied..BUT its RAINING IN MOSCOW !!

If it is failing America, it is proof the idea is lame in the long run and to follow the same path, emerging economies are dooming themselves to failure and will encourage the rich to get richer and the working class and the environment are crushed.

Reading the lead article, three things emerge to me:
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687

1. We are each of us slaves to this capitalism, as we are all giving our money to use the Internet which is run by corporations... We are using the energy produced by those massive companies every day.

2. Self interest is an incredibly motivating force. But what are people really trying to achieve? They shackle themselves to the rat race, they hunger for money, possessions and lifestyle, but as has been mentioned in other recent threads, happiness is not generally found there.

I am one of the most selfish people I know. That comment in itself is selfish. The thought of communal living scares the crap out of me, with other people and everything that goes along with that, the social responsibility. It is much more enjoyable to be selfish, to live moment to moment relying on the external stimuli of tv, Internet, radio... I have been well programmed to be selfish, and fit well into the capitalist consumer mould. I would like to meet someone who has evaded this insidious mind control. Maybe I should visit the Amish.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687

3. As the aricle finishes, what can possibly replace this paradigm? When the world is full of consumer zombies, something drastic has to happen... And it can't possibly be pretty. What other paradigms are there by which to work? Communism obviously doesn't work although in theory is all sounds fine and dandy... It leaves out the characteristicly human elements.

Are there any nations where something better exists? Has there ever been one in history? Is it a futile argument because humans love Maya?

Life, the universe and everything is very complicated!

Whether it is capitalism or America's desire to dominate the world?

USA has 600 billion $ of defence budget ,Could anyone ask USA govt why they need this size of defence budget with no enemies

I'm not sure I'd say America wants to dominate the world... It wants all the resources (see energy companies), so it can get all the money. If there are no resources, America isn't interested.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687

There is a saying that "peace requires eternal vigilence" which may be a reason for America's defence budget. There is also the phenomenon that the man who thinks he has everything will think other people will want it and so becomes protective. There is also the fact that America does have enemies, it may seem they have vanquished one recently but there will surely be others. Humans can't be trusted to play well togeher.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=36687

Also, re Anerica's defence budget, one could say Sikhs invest heavily into their defences, too (spiritually).

I am sorry to say but which country can attack america? After the collapse of Soviet There is no country in world that can even think of attacking USA.
There is no country in world that is even claiming an inch of USA land on the other hand India is surrounded by enemies with China and Pak both claiming land from India.If USA can be afraid then India should declare emergency and should raise its defence budget 3-4 times .

USA is only facing threats from terrorists and you don't need very advanced system of fighter planes or tanks etc The USA defence Budget and its strong military is just to show the world that who is the boss .

And if we compare USA with Russia now we can easily see How Russian economy grown after the end of communism .Russia reduced its defence budget and private industries were allowed .So USA should look to other causes rather than blaming capitalism

Here is a question to you all. What would Nanak say about Capitalism? I refer to the Bhai Lalo story ofcourse