Is Capitalism Doomed To Fail?

By Antonia Čirjak on June 1 2020 in Economics

We live in a world where everything revolves around private ownership and the uncontrollable spending of natural resources
  • Why are there not more electric cars on the roads today? Because the global market depends on the fluctuating price of one barrel of oil, and electric vehicles have no place in that game.
  • One may argue that the cause of climate change is capitalism itself. The environment is polluted because nobody wants to spend money protecting it, and profit always comes first for the capitalist system.
  • Economic inequality has probably never been higher: the major players are only accumulating more money, while the rest of the world becomes poorer.

Although we could trace the origins of capitalism back to the Neolithic revolution, when people started focusing on the notion of private property, capitalism as a dominant economic practice is a fairly new phenomenon. In a world where everything revolves around private ownership and the uncontrollable spending of natural resources, we can not help but worry about the sustainability of this economic system. 

A Flawed System

We can investigate several elements that will allow us to think of the flaws capitalism introduced as an economic doctrine. One thing that is in the heart of the economic system is profit. There is nothing more important for business owners and large corporations than profit. This model of thought, however, did become the dominant way of doing business, so we can almost rule out the size of a particular business as the only problem.

Sure, large corporations can accumulate more profit, but even the smallest participants in this field want to grow bigger and increase their profits. Capitalism, as such, only wishes to expand more and more, and given the current situation of economic inequality in global terms, this expansion will ultimately cause the system to collapse. The question is - why will it collapse?

Control Over Resources

First of all, the economic activity we have going on this planet depends on the planet itself. We would not be able to produce or create any kind of economic system for that matter if it were not for Earth’s natural resources. If you want to generate profit, you need to own these resources.

However, the problem in which somebody owns the resources required for the production of goods lies in the fact that a particular entity (a person, a firm, an international corporation) has control over those resources. This fact alone can be viewed as a mechanism that creates inequality.

Melbourne, Victoria, Australia 03/25/2018 Public performance poll on the street about capitalism
Melbourne, Victoria, Australia 03/25/2018 Public performance poll on the street about capitalism. Image credit: Xavi Zapater / Shutterstock.com

Economic inequality has probably never been higher: the major players are only accumulating more money, while the rest of the world becomes poorer. When a particular corporation controls all the available resources inside a specific geographical (or even cultural) region, it can set the prices the way it wants. This creates a scenario where the end consumers are left with no choice, but to buy a specific product, and bring profit to the corporation.

There Is Nothing Free In Neo-Liberal Capitalism

Although the term neo-liberal capitalism has ‘’liberty’’ in its name, a system like this does not want the competition. The global market is not a place where competitors play fair, and all it wants to do is eliminate all the smaller firms and businesses - because they are an alternative. If profit is your primary goal, then everyone else offering the same or similar services and products, are a huge problem, because they are taking a piece of the cake. 

Even though capitalism is nicely fed, its appetite has a constant urge for more. When we look at the expansion on which the global capitalist system relies on, it inevitably causes some countries to become wealthier than others. The consequences of this outcome are apparent: the tension between countries, wars, and constant battles over who has controls essential resources. For years now, oil has been one of these resources, but in the future, it may be something else, like water.

You might think that there is no way the world will run out of the water, but the current pollution levels of the air we breathe and the oceans that surround us are huge. Capitalism is the one that will change your mind on this issue because it does not care about the environment. Why? Because capitalism spends no time thinking about the adverse effects of uncontrollable resource spending.

All capitalism cares about is getting as much profit as possible from those resources. Unfortunately, for this economic system, and all of us, the resources are depleting fast, and it is only a matter of time until capitalism collapses into itself.  

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