Notes on Capitalism during Covid times

Let me tell you simple things. Covid 19 quarantine is helping me get this straight and simple: I like capital and those who aid capitalism. So this bothers me when capitalism is blamed for the mess we are in. This world is complex and I am someone who believes the right set of institutions hold the key to progress, human development, economic growth, sustainable development .. you name it.

Singling out capitalism for every evil or challenge we face is just missing the big picture. In the words of Joseph Schumpeter:

“Capitalism stands its trial before judges who have the sentence of death in their pockets.” 

Rainer Zitelmann argues here:

Many intellectuals fail to understand the nature of capitalism as an economic order that emerges and grows spontaneously. Unlike socialism, capitalism isn’t a school of thought imposed on reality, free-market capitalism largely evolves spontaneously, growing from the bottom up rather than decreed from above. Capitalism has grown historically, in much the same way as languages have developed over time as the result of spontaneous and uncontrolled processes. Esperanto, invented in 1887 as a planned language, has now been around for over 130 years without gaining anything like the global acceptance its inventors were hoping for. Socialism shares some of the characteristics of a planned language in that it is a system devised by intellectuals.
Once we’ve grasped this essential difference between capitalism, as a spontaneously evolving order, and socialism, as a theoretical construct, the reasons why many intellectuals have a greater affinity for socialism (in whatever form) suddenly become obvious.

For something as natural as capitalism (it has thrived even in the most capital scarce regions throughout history), making it the villain of the piece requires a certain degree of immortality. After all, all capitalists may not be changing the world or developing products that could usher in social change, but then, not all capitalists are devils either.

Yet, in the context of our new Covid 19 world, all of this changes. The pandemic has forced us to confront many questions that have been building up for a while – mostly, how did we reach here? How can we fix this broken world with heightened economic, social and racial inequalities? The challenges take many forms and permeate every sphere sustained by capitalism. The latest criticism of venture capital by Tim O’Reilly, for one.

These challenges couldn’t simply be attributed to capitalism alone. We are living in an age of great technological transformation accentuated by policies that widen income and wealth inequalities. The last and perhaps the most baffling frontiers of inequality – lack of access to opportunity and regional inequality – have subsequently been breached.

In this scenario, being a capitalist almost sounds like white supremacy, or Brahmanical supremacy, depending on where you live. History proves how swiftly racism or discrimination or inequality in all its forms have swiftly been linked to capitalism.

Will capitalism survive then? My steadfast view is: yes, it will. I can say, like I often say, that history proves it would. But I would rather list these 5 👇 to indicate what lies ahead of us:

  • More creative destruction as J Schumpeter would have said
  • More regional integration
  • More social cohesion
  • Changing patterns of consumption
  • An altered future of work

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