End of capitalism?


Byline: Dr Niaz Murtaza

COVID-19 has brought mighty capitalism to its knees in a David and Goliath way that its Stalinist and Islamist foes never even dreamt about. But worry not, the beast is still sturdy and will be back bellowing on its feet soon. Yet multiple threats have hit it hard since the 1990s after it proudly felled communism. Each has stemmed from its many serious flaws and hurt its long-term prospects.

Also read: How destructive have coronavirus and oil price war been for the world economy?

Post-9/11 terrorism emerged as a gross response to the spiritual void in capitalism and US hegemony. It caused a massive death toll but also imposed debt on the US as it led to trillions of dollars being diverted from productive areas to fight it. Terrorism has subsided but not the ire against the US, which may mutate into new terrorist forms. The 2008 recession came from capitalism's move from its social democratic form to an uglier neoliberalism as communism receded. As states cut regulation, it ventured into riskier areas and crashed in 2008. But few reforms took place later and capitalism remains reckless.

In the quest for cheap labour, neoliberalism poured trillions into China. It also created a strong ideological rival to the US and an economically conjoined twin which it can only hurt by hurting itself. Neoliberalism spawned huge inequality which has hurt the US middle class and created billionaires whose wealth dwarfs that of billions of people. Capitalism-fuelled climate change is making large areas unlivable.

But even neoliberalism can't satisfy elite greed now as it still follows rules, albeit ones that favour Western states and whites. However, large states like China and India and non-whites in the West can now compete under these rules. This has ignited bigoted populism. Neoliberalism exploits all workers and consumers in markets blind to their backgrounds. Bigoted populism undermines non-whites only via biases in markets and political and social spheres. At the other end, it upends neoliberalism often, as with Trump's tariffs against China, creating conflicts across two right-wing tools. Both have also made global institutions irrelevant. Adding to these threats, Covid-19 is now taunting world powers about how susceptible they still are to natural risks despite huge scientific progress.

One sees a path to capitalism's possible end decades later.

Put together these threats and one sees a path to capitalism's possible end...

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