Capitalist ideology has proclaimed that the market's invisible hand will best advance the interests of progress, that taxes on the rich and regulations on big businesses must be reduced because only the ‘risk-takers’ know where resources can best be allocated. In the eighties and nineties, when American economy was at its zenith, not too many lost sleep- not even employees- when the great Pan Am or many such iconic American corporate disappeared without getting any government aid. True capitalism!! It was fanatically believed that any sort of government intervention to improve the living conditions of workers, the poor, the elderly and jobless youth will create a ‘climate of dependency,’ and the government cannot simply throw money at problems. It was ridiculed that only socialistic countries like China, India etc. provided financial help to loss-making, state-owned companies and only socialistic governments blatantly intervened the market.
The last two three decades have been an era of frenzied economic activities. The glitter and jazz of free market economy had hit the people of socialistic bloc- who couldn’t otherwise think beyond their next meal- with such volcanic force that the Soviet Union and the Berlin wall collapsed in no time. China had to spurn Maoism though it took three decades for China to accept that it has been in desperate need of reforming uneconomical state enterprises. It made rapid strides in its willingness to sacrifice ideological purity for economic development and moving to capitalism. They called it ‘socialism with Chinese characteristics, It worked and one doesn’t have to look at any statistics but its consistent double digit GDP growth and its El Dorado cities Beijing and Shanghai - even in the current troubled time- for the proof. India is still yo-yoing but surely tilting towards the free market,though not with the same vigor of its neighbour. I thought the world was moving in the right direction till the financial tsunami originating in Wall Street and sweeping Main Street has forced the United States to abandon laissez faire capitalism in favor of government intervention in market economy.
There is a whiff in the air that world’s largest Private sector banks Bank of America,Citi as well as AIG are going to be controlled by the powers in Washington DC. US$17.4 billion rescue for General Motors and Chrysler, out of the US$700 billion financial bailout, was just an emergency loan to avert the immediate collapse of the auto industry, the backbone of U.S. manufacturing. With more funds sought for bail out in Detroit, no one is sure how things are going to pan out for the Big Three. There, certainly has to be more government control in GM, Ford and Chrysler too!! Now such Fed aided companies are at the wrong end of the tax benefits, if they outsource. Isn't it 'protectionism' a by-product of socialism??
Is it just 'American'? Legislature in Germany is seen paving the way for the government to bail out Munich-based Hypo Real Estate, which would be the first time in modern German history the state has taken control of a bank. They are going to adopt new laws to- at least temporarily- take control of all troubled banks. Swiss banks have started ‘un’coding their centuries old secret banking codes!!
Even today, the word ‘socialism’ is a taboo for the Americans. But, they are slowly reconciling to the fact that the failed/failing private sector could treat citizens disparately while the state- going to be controller- is obliged to treat all its citizens equitably, irrespective of…… etc,etc. which is the tenet of socialism. Small wonder, the Americans have already started repairing their shoes!!! Next, will the Manhattan be dotting with slums and shanties for the homeless - a la Mumbai-??? Though, I wouldn't like to live long to see those days!!! If the economy doesn’t turn around quickly, the hungry, non-believer Americans will become ardent devotees of Mao and demand for his right for the everyday share of cinnamon muffin and columbian coffee from his capitalist neighbor!!! Unfortunately the reality still is, if Americans sneeze, the rest of the world catch cold and flu!! And this flu epidemic is bound to spread to the rest of the world too.
Not to mention that I am very disconcerted about the unfolding of events those have been happening in the Mecca of Capitalism. Is it a sign that the world is regressing towards ‘socialism’?
Labels: Economy
posted by Ramesh Panicker @ 1:32 AM
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