Capitalism: Is It The Problem or The Solution? – Part II

Capitalism has helped improve the living conditions of millions of people around the world over the last couple of centuries. It has, however, come at a cost and never more so than today, as it brings with it a toxic mix of insecurity and inequality.

In recent decades the problems associated with capitalism have been balanced in many countries by the development of the welfare state.

This century, however, presents a new challenge, as inequality is affecting greater numbers of people around the world.

The challenge for capitalism is to continue to provide the creativity and innovation needed to drive the economy while also providing solutions to the insecurity such creativity and innovation generates.

The challenge, however, may be unreasonable and unfair, as it seems that such inequality is not caused by capitalism alone.

The traditional view of the left is that government spending and taxes should be used to address the difficulties caused by capitalism. The traditional view of the right is that government should reduce spending and taxes to free up capitalism.

Each side believes its approach will harness the best of capitalism’s energy and redistribute the worst of its excesses thus creating a fairer society.

It seems, however, that neither side is correct, as commentators suggest the problem is not only inequality but also the inability, of individuals, families and communities to benefit.

Given that capitalism has helped reduce traditional barriers to equality of opportunity, the real problem may not be capitalism but how to ensure people benefit from the opportunities it creates.

Traditionally, education is proposed as a solution although in recent years there is evidence that education alone is not enough to address the difficulties people face.

Capitalism with all its economic benefits, it seems, is here to stay and so, unfortunately, is the inequality and insecurity it creates.

The challenge for governments and people is how to manage capitalism’s inequalities while continuing to benefit from its opportunities.

SO, capitalism has proved its worth in helping to drive the economy but it comes with a price that is increasingly difficult to pay.

What do you think? Is capitalism the problem or the solution? Get in touch, we would love to hear your views contact Nick on 028 8224 9494 or via Twitter @nick_oec.