Capitalism: Regulate, rework, transform

This article debates on the need to regulate capitalism in a democratic society like India

• Liberalization has led to sustained growth and increased wealth
• But this growth has been unequal
• GDP indicates the growing prosperity of the rich and neglects the poverty of poor
• In today’s economy only those with capital(finance, land ownership, education etc) can hope to prosper

CAPITALISM AND GOVERNMENT

• The growing riches of capitals has enhanced their clout and now even influences the governments
• Capitalists fund elections of various parties and hence ensures that parties in power go soft on capitalists
• As a result, we see massive subsidies and schemes in favour of corporate biggies and namesake social welfare schemes
• Many of the flagship schemes are mired by

• Corruption
• Administrative neglect
• Underfunding

• Capitalists growth has been rapid and unregulated
• While this has allowed for economic progress it has also widened the inequalities
• Any democratic governments objective is to ensure equitable growth. Hence Indian government needs to control excesses of capitalism

FREE TRADE POLICIES

• The vision for democracies is to fulfill collective aspirations of people
• The tendency of governments to open up economies and expose ill equipped entrepreneurs to global competition fails to fulfill the vision
• There is a need to provide protections which provide

• Benefits to all sections of society
• Time to improve efficiency and competitiveness

THE IRELAND ECONOMY

• It was a perfect example for free market economy
• Its low rate of corporate taxes attracted many international corporates
• But in return country got a couple for clerical jobs
• It also allowed unregulated speculation and trade in finance sector
• The end result was a financial collapse that left the citizens paying for the greed of rich corporates and bankers
• The recent global financial crisis has also exposed the limitations of capitalist systems

WAY AHEAD

• China has shown how direct government control can help in creating wealth and at same time cater to needs of poor
• India needs to rework the model of capitalism to suit its domestic environment
• The people at helm need to ensure economic growth helps in fulfilling basic needs of all
• Only universal demand will help in establishing a stable and secure world