FAILURE OF CAPITALISM AND ITS CAUSES

There was a time when the world was divided into two blocks: on the one hand there was the Soviet Union, which claimed the tall achievements of the Communist system for reducing the gap

Written by

NUSRAT ALI

Published on

August 24, 2022

There was a time when the world was divided into two blocks: on the one hand there was the Soviet Union, which claimed the tall achievements of the Communist system for reducing the gap and creating equality among the humans, and on the other hand America was vying for promoting its capitalist ideology focusing on human rights and civil liberties. In 1990, when the Soviet’s Communist system collapsed, victory of the Capitalist system over Communism was celebrated in the American block, along with the expressions of extreme pride and boast.

Coterminous with the fall of the Soviet, books like End of History and Clash of Civilizations came to the surface, carrying the crux that no system can be better than the Capitalist and the Democratic system and no civilization or ideology or system can stand against our system (Capitalist system). The west started claiming that they have reached the zenith, whose substitute or alternative is impossible to present; however, like Communism, Capitalism too was based on the principles which defy human nature, and hence Capitalism also started yielding its horrendous results which caused restlessness among the masses. Capitalists started to paint Islam and Communism alike as their enemies so as to maintain solidarity among their ranks and created an emotional and irrational ambience so much so that the masses did not get the time to think about their own problems and plight. But the teachings of Islam persuade the believers to strive and struggle for justice and truth and Islamic movements in their respective countries are struggling for it.

In the pursuit of Capitalism, environment for terrorism was created; wars were declared against many countries to plunder and destroy them and immense greed for arms race began. In many countries MNCs were used to take control of the economy. In short all measures were used so as to create the hegemony of the US. They wanted to take control over the world economy to fulfil their colonial ambitions.

During this process their internal, ethical, economic and societal problems started piling and the masses began to develop anger and hatred towards the leaders and became restless. For the past few years, in the western countries and in particular America, people have started showing signs of hatred and dissent. Various protests have taken place during the international conferences in Durban, Madrid, Doha, etc. against the policies of the western countries.

Meanwhile, protests in favour of freedom and liberation started in Arab countries against despot rulers; some of them are still continuing. Protests in Tunisia, Egypt and Libya have already achieved the first level of success. Amidst all this, a huge protest with the name of “Occupy Wall Street” was organised in New York, on September 17, which swiftly got popular and spread all across the globe. On October 15, this protest, apart from America, took place in England, Canada, Japan, Australia, Italy, Hong Kong, etc. It engulfed 950 cities of 82 nations. In most of the countries the protests were held against their respective governments and in other nations like Philippines, Bosnia, etc. they were against the indirect colonialism of America.

It is because the adverse effects of the policies of the capitalist system are not only evident on the economies of America and European countries but have engulfed the whole globe; even India is no exception to it as the Finance Minister acknowledged the crunch when he said that Indian economy will also face the shockwaves of the present prevailing crisis. The rating of Reserve Bank of India has also fallen. Various reasons for the protests come to surface:

  1. The supporters of Capitalist nations claimed that the nations build on the principles of Capitalism would develop and become welfare states where everyone would have liberty and freedom and everyone’s basic needs would be guaranteed. However the Capitalist nations, instead of working for the welfare of all, focused only on the capitalists/industrialists and gave them such freedom that they even forgot their social and human responsibilities. They took up all the measures of earning profit, no matter right or wrong. The government was backing them and the correct concept of God was also eluding; hence no power could restrain them and they exploited the absolute freedom. The poor became poorer and poorer reaching utter destitution and abject poverty and the gap between the rich and the poor widened massively. The society started to develop anger and hatred for the Capitalists.
  2. Unemployment and poverty are big issues in America and other western nations. The economies of these countries are facing the crunch and hence governments are opting for austerity measures and pressing the masses to live simply sans extravagance. The age of retirement has been increased so as to avoid new recruitments, development schemes are being stalled to put government expenditure under control, subsidies on basic and important commodities have been revoked leading to inflation. Hence no poor man can either do business to eke out his living or could get jobs in the government sector. Now the masses are asking the governments as to why they should bear the brunt of the wrong policies  that the government took up and why they should pay for the luxuries they enjoy. People are demanding employment and basic amenities from the government.
  3. Another problem is that on one hand people are facing the heat of the meltdown while on the other hand big companies, corporate sectors and governments are not willing to cut down their expenses. Banks and brokers are declaring bankruptcy now and then, whereas the big corporates are enjoying their previous luxurious ways of life using the government’s aid. The Government came for the rescue and bailed those unethical companies out which went bankrupt. When people demand the basic amenities and goods, they teach them the financial crunch, however the salaries of the Wall Street officers are increasing continuously. Public representatives have also started joining the corporate and people’s hard-earned money is being used to upgrade the facilities of the rich. This attitude of the government is also adding onto the anxiety of the masses. Some western intellectuals have said some Communists are behind the present meltdown – a claim that is nothing but ludicrous. Even President Obama said that both Leftists and Rightists, who are unhappy with the government, are responsible for the present perilous situation.
  4. The constant support of Israel by the western nations, particularly by America, by fighting the Iraq and Afghanistan wars over which enormous resources were spent, is another cause of the financial crunch. In America people have been raising their voices against the so-called “war on terror”, but the administration is deliberately turning a blind eye to the issue. Besides the destruction of other nations, the war on terror has cost America dearly by making it earn a bad name in the world and causing the financial crunch. People are asking why love for Israel and hatred for others have become so intense that even America’s economic and ethical destruction has been put at stake.
  5. Protesters are claiming that this is democratic awakening and the protest will be like that in Tunisia and Egypt. They said we want to overthrow the government as at this moment corporates are ruling us and the present system cannot be termed as democratic. This is not a welfare state but an exploitative state. They said policies are being devised to suit the interests of the corporate and the public representatives do not care about the state of the people as they become totally different once elected. Hence a new system should be adopted in America where even after elections, people can have their say in their affairs, where corporate and capitalists are bound to do their duty, where public representatives have connections with the people, where basic needs get guaranteed, where wealth does not get concentrated in few hands and where everyone gets justice. Hence the protests not only are about the deteriorating financial conditions there, but also about the failure of the Capitalist system.

All the above mentioned problems have risen because of not understanding completely man and the capital and the relation between them. If we have a fair understanding of the need of the capital/ investment, ethics and distribution system, then it would become very easy for us to understand why there is no difference between the system of America and China and why both of them bring out the same horrific results on the lives of human beings. In the capitalist system, money, instead of becoming means for man, becomes the ultimate goal and the human beings who are vicegerents of Allah, become merely things to be used. Man used to earn capital through his labour or ability, but now capital is earning more and more capital, without any labour or ability. Allah put the share of the other needy people in the wealth of the rich; however the rich instead of giving the poor their due started exploiting their portion for more benefit. Man was taught that his wealth is bestowed to him from Allah, and it is a test for him as he will be accountable for it, hence he should analyse whether he is faring well or not in his test. But the capitalist system threw away all the values from his life and once he became forgetful of Allah, all his ethical and human spirits became dead. When money reaches selfish men, it gets concentrated, and as these men do not possess any values and hence wealth becomes evil. This can be experienced in other western countries where wealth instead of being source of good, has turned into something evil.

In this situation Islam’s interest-free economic system can save the world from further destruction, and Muslims should come forward to present it to the world. The world has seen the Communist and Capitalist systems, which have failed rather miserably. And anything alien to the Commandments of Allah would always be unsuccessful. Maulana Maududi, an intellectual and keen observer of the surroundings and situations, said long time ago that anything done against the nature of human beings would sooner or later bring its bitter fruit. Communism and Capitalism both have failed, the only difference is that Communism declared its defeat 20 years back whereas Capitalism is now realising its failure.

[The writer is Secretary-General, Jamaat-e-Islami Hind]