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capitalism, socialism, the grameen bank and the lessons it can teach us

May 13, 2009

A friend of mine pointed out this interesting synthesis between capitalism and socialism in which capital is being distributed based on need rather than profit and yet still capable of making a sustainable profit: Muhammad Yunus – Nobel Lecture.

He described it as, “The use of capitalism to defeat its affect on the third world.”

(It’s just the kind of thing I’ve been looking for. Thanks, Jeff.)

Of course, it’s only one example, and it’s not a perfect one at that because only about 58% of borrowers have cross over the poverty line, but I think that it at least goes show that the system is not the entire problem. And as one person wisely pointed out, “[We] should not be too quick to write off experiments of this kind because they don’t fit our own standard bias.”

Personally, while I agree that capitalism itself often fosters greed and violence in the way that it’s structured, especially considering the fact that profit is the bottom line, my opinion is that the problem isn’t with capitalism as much as it’s with the inclination of people to abuse it. The way I see it, socialism would help to limit the economic and societal conditions that foster things like greed and violence, and that’s why I consider myself a socialist, but that’s not the end of the struggle. It’s just the beginning.

Others strongly disagree with this position, however. One person, for example, wrote to me saying, “Capitalism isn’t abused by people. It abuses people.”

That may very well be, but my view is that capitalism doesn’t so anything on its own; it’s simply an economic system that is utilized by certain people. And even though I agree that it often fosters greed and violence in the way that it is structured, I’m of the opinion that any economic system can be abused by greedy, selfish people.

As I said, I believe that socialism — and by “socialism” I mean a mass movement towards economic democracy — would help to limit the economic and societal conditions that foster things like greed and violence, but I don’t think that it can eliminate them altogether. I don’t buy the idea that capitalism is to blame for all the evils of the world, and that once capitalism is replaced people will all of a sudden stop being greedy and selfish. What I think is missing in discussions like this is the idea of personal responsibility. Yes, the capitalist system is unfair and set up to promote aggressive competition, but people also have to be willing to take responsibility for their own actions. We can’t blame the system for everything.

I guess my point is that I don’t think vilifying capitalism serves any purpose other than to antagonize people who self-identify themselves as capitalists or the average worker who currently supports the capitalist system in general. I’m more than willing to acknowledge and discuss the weak points of the capitalist system, the strong points of the socialist system and how to work towards implementing such a system, but I’m not willing to deny the places where capitalism has contributed to the development of society or the advancements made in areas like agriculture, medicine, science, etc. (I’m also a firm believer that a successful transition from capitalism to socialism requires a certain level of infrastructure and technological advancement.)

So even though I realize that capitalism has its limits, I think making enemies of the “capitalists” and their resources is counter-productive. What is more productive, in my opinion, is trying to get the majority of the working class to recognize and understand these limits, as well as the fact that there are viable alternatives available.

At least, that’s where I currently stand. My position is always amenable to change.

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