Will Capitalism destroy the World? | The Power of Money |Sohail khan

 Has Capitalism improved the world?

Or is Capitalism an ideology that has destroyed the world?

Hello, friends!

Welcome to the third article of the Basics series.

Come let's understand the successful ideas of Capitalism and its failures.

Starting with the positives:

The largest successful idea of Capitalism might be Decentralisation.

In capitalist countries, everyone has the freedom to start their own business.

Even you can start a business.

And every year there are lots of new businesses starting up.

These businesses work independently from each other.

It means that they are Decentralised.

Will Capitalism destroy the World? | The Power of Money |Sohail khan 

They compete with each other which leads to innovation.

On the other hand, in communist-socialist countries like the Soviet Union,

everything is controlled by the government.

All major production areas and industries are controlled by the government.

There is only one point of control. Centralization.

For the top few people to control all the production means of the country

and to balance the economy is very difficult.

This is believed to be one of the major reasons

for America's win against the Soviet Union during the Cold War.

Because of the central planning of the Soviet Union,

their growth was far less when compared to America's.

Will Capitalism destroy the World? | The Power of Money |Sohail khan 

When these numerous decentralized businesses in capitalism

work independently,

They will also compete with each other to better themselves.

They get a financial incentive here: the Profit.

To earn this profit, the businesses would want to work better.

Better than their competitors, which will lead to innovation.

So Capitalism provides a financial incentive that triggers Innovation.

Because of this innovation, in the last 100-200 years, in Capitalism,

we have seen a level of technological development that

we had not seen in the two thousand years of human history.

Think about it.

Cars, Airplanes, the Internet, Computers, Cameras,

all these were invented in the last 100-200 years.

People favoring Capitalism also argue that

because of it, in the last 50 years, poverty has fallen globally.

The education level of people have risen

And the overall living standard of people has improved a lot.

Another positive point of capitalism has been that it lets everyone dream.

That you too can reach the top if you want.

Everyone has a chance to reach the top.

If you work hard, you too can become like Bill Gates or Elon Musk.

Whereas, in a Socialist and Communist system,

you can't become that rich.

Additionally, a consumer, in a capitalist system,

has more options in every aspect of life. Many people will list out these benefits of Capitalism that I told you

and will promote this ideology without a second thought.

They'll promote privatization.

But it is important to understand that there are several adverse effects as well.

Some of them are so harmful that they may destroy the world.

Why am I saying so? Come let's find out.

The first failure of Capitalism is Monopoly and Income Inequality.

Capitalization indeed has Decentralisation,

that you have the freedom to start your business,

but realistically, what happens is that businesses merge among themselves.

Large businesses often takeover smaller businesses.

It possible here that one business may buy out all its competition

and they become only one company.

If there is no more competition and one company rules the entire sector,

it is termed as Monopoly.

Will Capitalism destroy the World? | The Power of Money |Sohail khan 

Another phrase used in Capitalism is 'Acquire or Get Acquired.'

Suppose you're a fish in a lake.

Either you grow by eating other fishes,

or a bigger fish will eat you.

Capitalism works similarly.

Either you start acquiring other companies to grow yours

or some bigger company would absorb you

.

Do you remember there used to be a company Jabong?

Myntra acquired that.

And Myntra was later acquired by Flipkart.

And then came the international giant, Amazon.

Flipkart had two options.

Either Amazon acquired it or Wal-Mart.

Today, the companies termed monopolies have become so

by acquiring other companies.

In social media, Facebook is considered to be a monopoly

because Instagram and WhatsApp, that are the two most used social media apps,

are owned by Facebook.

Google is also said to be a monopoly in the world of the internet.Android is owned by Google.

Google Maps, Google Shopping, Google Pay, Google Loans

The parent company of Google, Alphabet,

has acquired 241 companies.

What I mean to say is that this whole system creates inequality.

Where the rich people and the rich companies have all the wealth,

and the small businesses cannot compete with them in reality.

In theory, there is competition in Capitalism but reality,

how can small businesses compete with these monopolistic giant companies?

In the last 30-40 years,

since the neoliberalism ideology staged a comeback globally,

income inequality has risen rapidly across the world.

Will Capitalism destroy the World? | The Power of Money |Sohail khan 

It was reported in 2017 that the top 1% of people,

control over the 82% of the new world generated in the world now.

The richest 42 people in the world,

hold as much wealth as half the population of the world.

That 3.5 billion people collectively own.

It is not possible that these 3.5 billion people are extremely lazy

and only these 42 people have worked hard to get this rich.

There is no direct co-relation with hard work.