Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience


Beyond capitalism?

January 19, 2016


The writer is a political and development economist.
The writer is a political and development economist.

EFFORTS to replace capitalism started right after its birth given the dislocations it caused soon. Even though 250 years later it continues to grow, its record is so mixed that searching for alternatives or at least improvements is still crucial. But to slay the beast, one must understand its nature first.

All socio-economic systems include underlying values and ideologies describing human life purpose and social relations; the main institutions implementing ideology; and their detailed policies. So, what is capitalism? Is it the mere presence of the profit motive, markets and private enterprises? These all existed much before capitalism. But from being fringe forces earlier, these values and institutions have become society’s dominant forces under capitalism.

Its core values — individualism, materialism and self-interest — have replaced traditional duty to gods, royalty and community etc as dominant global values. Institutionally, markets, which earlier covered a small sliver of human needs, now cover needs earlier provided free by communities, families, self-production and nature. Baby-sitting agencies replace family networks. Supermarket food replaces farm produce. Pristine, open access beaches become private resorts for the rich. People spend free time at malls instead of social circles. This intrusion of markets in all life spheres is capitalism’s essence.

These changes have given billions living standards earlier confined to royalties. However, the negatives are increasingly evident too: enormous inequality, ecological destruction, conflict, economic instability and anomie. Some of these even threaten life on earth. The application of the logic of market forces in all human spheres is a good thing, neoliberal sages say. But market forces were never accorded such respect before. In fact, the Urdu word for market forces (bazari log) has very negative connotations. The idea that societal interest is best served by giving the lead to commercial minds obsessively pursuing short-term self-interest and profits, often in ruthless rat races, is ludicrous.

Intrusion of markets in all spheres is capitalism’s essence.

To find an alternative, one must first review the failure of capitalism’s erstwhile challenger. Soviet-style communism’s core values also prioritised materialism, but unlike capitalism, it pursued it through communalism and duty to the state, not individualism. Institutionally, markets and civic institutions were missing with an omnipotent state doing everything, even more than markets under capitalism. The system crushed individual initiative and consequently failed despite its salutary ethos of equality.

Thus, traditional society, communism and capitalism have all failed. The first two crushed individual initiative and caused serious rights violations and low productivity. Capitalism’s marriage of individual initiative with greed delivers high productivity but causes enormous ecological, political, spiritual and social problems. This brings humanity back to the drawing board.

A sustainable alternative must have foundational values and ideology which neither crush individual initiative nor unleash unbridled individual initiative linked mainly to greed. This means linking the ultimate life purpose not to self-interest or duty but the higher aims in human nature: inquisitiveness, wisdom, artistic creativity, altruism etc. Such aims unleash high individual energy, innovation and productivity too, like self-interest, without causing the same destruction.

Altruism has produced iconic agencies like MSF and Edhi Trust. Inquisitiveness has produced all major scientific discoveries from Newton to Einstein. The pursuit of wisdom has produced prophets and saints. These accomplishments did not involve self-interest and outshine everything produced by it.

Institutionally, this ideational base will make market institutions exist along with cooperatives, labour-owned companies, non-profits and professionally managed state agencies without supplanting them. Since self-interest and markets will not dominate, the system will not constitute capitalism despite their regulated presence.

The biggest challenge to this idealistic vision is that instead of higher aims, the majority currently prioritises petty self-interest or mindless duty to false gods. As the Soviet experiences reveal, a system fails if people do not adopt its values freely. Capitalism’s advantage is that it is much easier to mobilise humans around animalistic urges like greed rather than godly pursuits like wisdom. A capitalism-induced climatic or nuclear catastrophe may ultimately push humans towards higher aims.

Meanwhile, the focus could be on vanquishing not capitalism but neo-liberalism, its ugliest form. Scandinavian welfare capitalism provides a potent alternative. Scandinavian societies are also increasingly adopting post-materialistic values which may eventually produce post-capitalist economies. Until then, following Ghalib’s stoic life outlook, those already fed up with capitalism must watch humanity’s trysts with it bemusedly and stoically.

The writer is a political and development economist.

Published in Dawn, January 19th, 2016