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The Pitfalls Of Liberal Capitalism

By G. Asgar Mitha

 06 April, 2015
Countercurrents.org

Big oil, big steel, big agriculture avoid the open marketplace. Big corporations fix prices among themselves and thus drive out of business the small entrepreneur. Also, in their conglomerate form, the huge corporations have begun to challenge the very legitimacy of the state.
?
Gore Vidal (died July 2012, age 86). - American writer and public intellectual.

Towards the end of the twentieth century, the American capital system had replaced feudal, social and communist economies followed by liberal capitalism in the late twentieth century. In my opinion liberal capitalism is a combination of all three systems.

Thomas Piketty French economist and author of Capital in the Twenty First century wrote that returns to capital are rising faster than economies are growing. The wealthy are getting wealthier while everybody else is struggling. Inequality will widen to the point where it becomes unsustainable – both politically and economically. Noted economist Joseph Stiglitz argues that income inequality is also a moral issue and is hurting the economies.  

The situation has changed far more drastically since the financial crisis of 2008 when the bankers, corporations and financial institutions were bailed out while the ordinary Americans lost their jobs and houses and fell on difficult times. It has created neo-slavery (neo-feudalism), not only in the USA but in Europe (notably Greece) as well as those countries that have subscribed to liberal capitalism. Will this lead to a backlash and a failure? What could replace the system and under what circumstances? 

Having studied in USA and living in Canada since 1969 and working in Pakistan and oil producing countries I've noted the same equality imbalance beginning in the twenty first century. Baby boomers like myself have been very fortunate for whom debt was a bad four letter word. That was capitalism when income was more fairly distributed and corporations were fair and not as big until the early 90's. Then came greed generated by globalized equity markets and the addiction to technology resulting in an exponential growth of debt. The big corporations started fixing prices among themselves and sucking the money upwards from the small investors in a manner similar to a vacuum cleaner lifting up the dirt from the floor. Today the big corporations are far more powerful than the state they operate in and the politicians supporting them. Our form of democracy is bribery, on the highest scale- Gore Vidal.

So how do the big corporations and the state (politicians) collude to distract the masses from their problems and prevent a backlash? Since they also control the media, lies filter downwards that nothing is wrong with liberal capitalism. The average person works five days per week while figuring out how to make ends meet with rising costs of goods and debt management. When nothing makes sense, the theatres, restaurants and bars are available for relaxation on the weekends,  that much needed vacation or relaxing in front of the television to watch the Saturday and Sunday night sports. The big corporations own everything in their conglomerate form- from the very basic food in grocery stores to banks, newspapers, television, sports, hospitals, banks, oil, airlines, pharmaceuticals, education, land development, consumer outlets, etc. I tried to find something they do not own and gave up. Big corporations even have a say and share in what the state controls and have challenged its very legitimacy.

Big corporations get together and decide on an agenda and venue for a war - a diversion tactic to prevent a backlash and a means for making more money selling weapons to some rich oil sheikh or poor Asian or African nation. It just happens that America's two property right wing parties with different names represent the big corporations controlled by that one percent. The party in power, whether signified by the elephant or the mule, brings in the pollsters from the payrolls of the big corporations and cook up numbers to provide legitimacy for the agenda such as that for the wars in Iraq and Afghanistan. It is the state's jobs to lie on the behalf of the big corporations.

The big corporations and their supporters are quite confident that their system of liberal capitalism is invincible. It just seems that the ninety-nine percent of the neo-slaves are well tethered to go in the direction charted out for them by the elephant and the mule cracking the whips. The corporations avoid being seen. The only problem is that history does not lie that other invincible systems have failed in the past. It also tells us the mannerisms. They collapse by a combination of complex internal and external factors.  

The internal factors have already become obvious. As central capitalism exports terrorism and extremism, directly or indirectly or in collusion with political subscribers of capitalism in other countries, a form of social terrorism has grown due to waste, greed, debt, religious decay and dissatisfaction. This home grown social terrorism has appeared in the forms of mental illnesses, notably depression. Drugs, alcoholism, family breakdowns and high rates of divorces have led to criminal activities - parents killing each other or their children, mass killings in schools and malls, suicides, etc.  Andreas Lubitz, a co-pilot of Germanwings flight 9525 deliberately crashed a plane carrying 150 passengers in Europe's French Alps. Germanwings admitted that Lubitz had been suffering from mental problems. The internal factors are prevalent both in countries exporting capitalism, terrorism and weapons as well as in the countries adopting liberal capitalism. It includes religious extremism, child slavery, gambling, sex trades, and global usage and addiction to drugs. Stiglitz is correct that income inequality is not only become a moral issue but it is hurting economies.

External factors that might contribute to the failure of liberal capitalism are time functions such as a major setback in a war agenda, natural catastrophes, religious revival or globalization of currency wars. The best of the war agendas can fail due to combinations of poor planning or natural catastrophes such as Napoleon's and Hitler's invasion of Russia due to intense winters. Religious revivals are also known to bring down great empires such as witnessed by the Christian revival that challenged the mighty Roman Empire in Europe and the Middle East or the Islamic revival that eventually brought peaceful changes in Arabia and Persia. In their purest forms, the teachings of Islam and Christianity are no different as are all other great religious teachings. Big corporations are averse to religion and reject it as being fundamentally stripping their power and control over the people.

The fissures are becoming evident that liberal capitalism could widen to the point where it becomes unsustainable due to the internal and external factors and be replaced with a socio-capital system by honest politicians breaking up big corporations. It is not implausible.

G. Asgar Mitha recently retired from working with a large oil company in Canada as a Technical Safety Engineer





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