By Ronald Logan
In capitalist dominated economic markets, the theory is that entrepreneurs, desiring their own profit and competing with each other, will inspire higher quality work so that superior goods and services will flourish. This system originated as an advance in the functioning of medieval village economies. In a village, let us say, there is one cobbler; and then another cobbler comes to the village and opens a shop. Now there are two cobblers, and they are in competition. When there was only one cobbler, there was no competition. He could do poor work, and the people would not have quality craftsmanship for their shoes. The second cobbler comes in and the two cobblers compete with each other. Then the people go to the one who does the better quality work, and the other gets the message that he has to improve the quality of his work. So, through competition, this type of capitalism was very effective and made for higher standards and better quality of work.
From these origins, the capitalist system has grown and grown and grown, until now there are international corporations of immense size owning many subsidiary corporations. They have become so vast in their scope that they begin to resemble the single cobbler in the village economy of old. Their goal is to eliminate the competition, to eliminate anything that would stand in the way of their profits. They are directed to this approach by the same system that inspired the village cobblers into competition and that promoted superior quality work. But now, there is no village; there is the reach of the international corporation across the globe. They own many subsidiary companies, and they have become very powerful entities. These entities have one purpose still: to increase their profits and their wealth by any means possible. But they have become so powerful that their capacity to increase profit and wealth lies primarily in their ability to suppress competition — and even to control governments and world economics — to get the most they can.
Greed now dominates to the point where the original system of healthy competition has been corrupted, and the powerful corporations’ intention of gain is now so extreme that they control great amounts of wealth. And they have now become the main controllers of power in the world.
It is mainly the multinational corporations and their greed that have brought the world to the brink of catastrophe. They want only to increase their profits. The goal of improved quality driven by healthy competition that was seen in the village economy is gone. The motivation is no longer to improve quality as a means to increase profit. It is to control the market, control the buyers, control the workers. So the capitalist economy now gives expression to an extreme of greed.
Power Over Governments
Those who live by the sword, die by the sword. The sword that the great corporate entities live by is that of cutting through all obstacles to attain the maximum benefit and profit. That has meant the acquisition of power, and the use of this power to control governments so that governments provide them what is needed and do not stand in their way.
Due to this, governments become weak. The corporations are sufficiently powerful to control governmental bodies. The regulatory systems and the laws set to control these powerful entities are weakened or ignored, leaving them free to pursue their financial well-being and their power. The goal is no longer to increase quality so as to increase profit, but to increase power in the world — and not for the benefit of the society, but for greater corporate gain. They exert all manner of power and control to gain the proper atmosphere for the maximizing their bottom line. So it is that the competition that was a very healthy approach in the simple village economy has now become detrimental to the human society. Due to the greed for ever-increasing profit, the goal of capitalism at this point no longer breeds quality and improvement in services; it has breads power-mongering. With their ability to control and influence governmental bodies, regulation is stifled and the powerful multinational corporations are able to increase their influence unchecked.
One result of this unchecked greed was the mortgage crisis, centered in America. Federal government regulation and oversight of the banks was weakened, creating an opportunity for banks to maximize their profit by pushing alluring mortgages. The banks and mortgage brokers then encouraged people to overextend their debt. This generated greater and greater profits for the banks, but their reckless pursuit of profits was done without care for the welfare of the people acquiring the mortgages.
So, with the lax regulations, the corporate lenders saw great opportunity to make maximum profit. And their greed drove them to acquire more and more profit even when real money was not there. The trading in the lending market became more and more insubstantial and theoretical. This caused a great imbalance. So long as profit was being made, the practicality of having real money behind the loans, and consideration of factors impacting the ordinary person became irrelevant. It was then inevitable that this approach would play itself out to a tragic end.
The world stands at a critical juncture, and over the next few years the situation will become more critical. Then the world will have to make a choice: Will governments regain their strength, and will they recognize that they live in an international community that requires global regulation? The world today is like the Wild West run by the fastest gun — run by the multinational corporations. There is no government of the world, so the multinational corporations, with their drive for acquisition and profit, have taken over. It is time that the governments of the world unite and face the crisis that their failure to take responsibility for economic regulation has caused.
Beyond the global economic crisis are a stack of other critical problems that will also soon come to fruition. There is the aging of populations, oil depletion, climate change, environmental pollution, excessive population, earth disasters, food shortages, water pollution, water shortages, etc. These are coming up right behind the economic crisis, and their mutual interaction will magnify the impact of global crisis, should proper actions not be taken. So the world is coming to a place of crisis — again, because there is no governmental body, no multinational body, to look to the welfare of all of the people; there is no one to take this charge. The capitalists cowboys are running free, getting the most out of everything they can get, taking humanity to the brink. Can we continue to let them be unregulated worldwide entities?
The current situation has created opportunity for the governments of the world to band together, to unify themselves and dig out of this mess by forming a type of enlightened socialism. Under the approach of this enlightened socialism, the governments would work together to regulate greed. They would take dynamic action to see that the capitalist privatization and greed paradigm comes under the control of reason and that corporations serve the welfare of the international community, and not solely that of their private profits. At present, the intention of capitalism is creating profits for the corporate body. If the intention were instead that of promoting the welfare of the world community, this would cease the oppressive dominance of capitalism.
What, for example, could the governments do together to deal with the situation of so much trading and lending and valuing and devaluing? With a worldwide approach, governed by the world organization, power could be given back to local businesses, to local communities. There could be a uniting to develop a global solution that promotes local economies. This would create grounding in a practical economics, not a theoretical one based on monies that don’t exist and on debts and more debts.
What if governments also decided to erase all foreign debts and start afresh? There would be no national debts, no international debts. What if the playing field were leveled? The governments could decide to form one type of exchange — no dollar no Euro; there would be one exchange and all debts of nations erased. And then ample monies could be poured, in a simple way, to support and develop small businesses and economic diversity. Economic diversity, small business development, local economic independence would be promoted as much as possible and directed toward meeting the basic needs of all peoples. And, as well, strict regulation would be put in place to suppress the greed of capitalism. This enlightened socialist approach would solve today’s growing economic crisis.
At this critical juncture, it may be that the global community will come together and create a rational approach that serves human welfare. But it may also be that the the greedy capitalistic paradigm will remain so dominant that this does not happen. If that is the case, these powerful corporate entities may vie for greater dominance, and they may start to divide the world into corporate-controlled entities with weak governments that lick their boots. If in this way they take yet greater power, the middle classes of the world will fall away. There will be the poor workers and the rich consumers. And there will be the totalitarianism of the controlling corporate entities.
So in the present crisis there are two solutions. One is some type of enlightened socialism. The other is totalitarianism control by those motivated to run the world to serve their greed. Should this later approach come to dominance, it will not last long. Their exploitation and greed, without consideration of the needs of people, will bring their downfall. But this downfall would bring much suffering.
So the world stands at a turning point, at a juncture. It may be that dharma will prevail at this stage; capitalism may give way to a type of enlightened socialism to pull the world out of this crisis. But it may be that the multinational corporate powers take more dominance in the weakened situation and the really big corporate entities ever further utilize the weakened governments under their control and establish a short reign of this capitalist tyranny.
Change of Eras
The system that was originally built in which the cobblers — the village craftsmen and merchants — competed to produce higher quality goods, brought social progress. The early merchant society was a healthy advance. But, as with all class dominance, when the capitalist era reaches towards the end, it becomes so extreme that it becomes demoniacal. It becomes a force against the human society. Then change is inevitable. And what follows the capitalist era? There is shudra revolution, mass revolution, led by those enlightened intellectuals who care for the welfare of humanity. The people cannot lead themselves as a mass, so the enlightened intellects give leadership to bring forward change. But what follows the revolution? Then the ksattriyas will take the lead.
The ksattriyan class is often seen simply as warriors. But ksattriyan society is not necessarily a martial society. In a ksattriyan society, it will be the ksattriyas that determine the values and approach of the society. In the capitalist society, the value is on personal gain; greed is the motive. In the ksattriyan society, by contrast, the dominant motives are duty and honor. Ksattriyans live for duty and honor. The ksattriyan society is not necessarily a military society, but it is a very well-ordered society, as people uphold their social duty, their collective responsibility. There is not the extravagant individualistic indulgence of capitalist society, but instead a strong sense of duty to collective interests. The growing reaction to capitalist neglect of individuals, communities, and the environment — and all the insecurity and suffering this has caused — will naturally give momentum to the rise of ksattriyan society.
Now the wheels of social evolution turn, and that system of competition which once created increased well-being and wealth has become a tyranny upon the people — oppressing them with materialism, oppressing them with the power of the profit-driven, corporate entities. They have lived by their greed, and so they are falling. They may rally for yet a few more years of dominance, but still they will fall. So it is now a time of change.
We should not think that these are times of pain and suffering. These are times of dynamic change, and of great opportunity for humanity. But naturally, in times of great change, of a shifting of class dominance, some suffering occurs as that which has been imbalanced breaks down. Now is a bright time, a time of change. Change is not always easy. How deep and how difficult it becomes will depend upon the response of the world’s peoples, and upon the availability of a guiding ideology that can provide enlightened solutions.
Copyright The author 2012
3 thoughts on “Managing the Fall of Capitalism: A Prout Perspective”
This all sounds good, and sets up a eutopia for the world. The problem is human nature won’t allow this type of society to develop. It has been tried and everyone loses incentive and ambition. There is no reward for outstanding service or accomplishment. It becomes a gray society, but the intellectuals don’t get that part of their model.
Arnold: In editing down my article for content brevity, I could not convey all of the important characteristics of an ideal society. I fully agree that human incentive and ambition must be supported by the society. A healthy society depends on cultivation of the full potentialities of all, and particularly of those having greater capacities for service. This is not possible without rewarding initiative. As was seen in the Soviet Union, an economy that lacks an effective system of incentives will come to failure.
Of course, I do not mean to say that the extreme wealth inequality of the American economy is required for effective incentives. Other countries do as well, sometimes better, with far less wealth inequality. What exists in America now is simply uncontrolled greed. Just as an excess of wealth equality led to the collapse of Soviet system, the excess of greed in the American economy is creating imbalances of another kind that is bringing crisis to our capitalist economy.
A balanced approach is required, and this is the task for the present humanity to work out.
Perhaps just as Frodo… the humble, earth-honoring hobbit… was the only one able to carry the ring to the only place it could be destroyed – at its source. We need the entrepreneur – the cobbler. I need to feel my
respon – sibility. I pay more for local products created by friends. After all, what is the economy for? Supporting friends and family or supporting an environmental destroying economic system?