Alternatives to Capitalism and the Building of Resilience


The 20th century saw the proliferation of a number of alternative economies, both in theory and in practice. The main differences in these economic systems are between capitalism and communism. This is unlike the situation in the 21st century where capitalism has become the dominant economic form across the globe.

Communism hit its epoch at the height of Soviet power and in the Soviet satellite states of the Eastern European bloc, Cuba, and a number of other Communist experiments in other Latin and Central American states, most notably in Nicaragua. The essence of the Communist system is its emphasis on equality rather than on freedom. The idea is to redistribute the wealth generated by the economy to the people in the form of wages and welfare services. This system proved to be very successful by the late 1950s in the Soviet Union but from this point onwards, did not prove to be very resilient to the enormous economic pressures from outside of the nation. The crucial point here is that the emphasis of the economy was on equality for all rather than freedom for all. This is in contrast to Capitalism in which the emphasis is (or was until the advent of the neoliberal ideology from the mid-1970s onwards) on freedom rather than on equality. Thus, Capitalism is a system that encourages competition and self-reliance in which people reap the benefits according to their efforts (theoretically). Hence, we see huge disparities in wealth and in equality in capitalist societies while in communist societies, we see a lack of freedom. This is quite intriguing because history shows that, in terms of the ideas underpinning both systems, they stem from the same root, that of the western Enlightenment where freedom and equality and two of the core principles of Enlightenment thought.

There are large-scale alternatives to these main systems, the most notable being the social democratic, or social welfare state. This form of economic system is now prevalent in the Scandinavian countries and in fluctuating pockets of Western Europe. As well, countries such as Australia, New Zealand, most of Western Europe, and of course, the Scandinavian countries were the model social democratic nations in the 1960s and into the 1970s. Basically, the underlying principle of such economies is to tax the population and business heavily, but then to redistribute the tax revenue back to the people in the best possible social and welfare services. What this meant that there was an emphasis on equality (through redistribution) AND freedom because they were also model democracies. This is not to say that they were perfect nations by any means, but they were vibrant, wealthy, democratic nations. It was a system that took the best of both major Enlightenment ideologies and made them very successful.

There have been other alternatives (in practice) such as the kibbutz system in Israel, and the cooperative based systems of Nicaragua and current-day Venezuela. However, these have been fairly isolated examples. For the purposes of this discussion, the three main economic systems outlined above will be analysed below.

So, where do these three economic systems stand in relation to resilience?

Let’s start with Capitalism. It appears that current-day neoliberal capitalism provides all the mental ammunition for the individual to achieve high levels of resilience. The emphasis on self-regulation and the psychological sciences, particularly positive psychology, means that the sheer amount of self-help paraphernalia that has proliferated in the neoliberal era (the last 40 or so years) has been massive. So, the self-help groups, the self-help media, the messages that come through from the huge amount of personal development coaches, and so on, send positive messages such as “if you think you can, you will”, “think positive and you will achieve success”, and so on. The psychology is there; however, the economic system is not available to facilitate this. So, for example, employment opportunities become eroded to the point where wen the unemployment rate is 6%, there are not enough meaningful and fulfilling jobs to go around. Casualisation has become a major factor in today’s job market. The taxation system is regressive and does little to incentivize workers. And so on and on. Finally, there is a rapidly eroding welfare system that is not even assisting those in genuine need. This is a global phenomenon in all western democracies. Ultimately, what this means in terms of resilience is that Capitalism actually eats away at the resilience of the majority of people, and then when they fall the cracks, it seeks to label them as losers who do not deserve to be supported by the system or even to regain any form of resilience. Anything vaguely resembling community or collective help is shunned, so it is very difficult for the individual without resilience to stay afloat.

Communism appears to have an ideal system of redistribution that can serve to support people when and as they need it because the wealth generated by society is redistributed evenly across the population. As well, collective and community efforts are encouraged so this provides a ‘natural’ support system for the population. The psychological ammunition for resilience appears to be quite strong in these societies as the competition to be better than everyone else is absent. This ensures that the resilience that does exist is not eroded, particularly because of the ‘natural’ support system of the community. The problem for Communism may well be its lack of freedom for the people. Freedom of thought, expression, choice, and so on are fundamental bases of resilience, as they tend to boost resilience.

The social democratic system appears to hold within it a very positive recipe for resilience. The key here is that it is a capitalist system that generates tremendous wealth. These economies also appear to have found the answer to being able to provide meaningful work for a large part of the population, through high-tech industry and lots of work generated in the arts, and in quality manufacturing. As well, the massive redistribution of wealth through the tax system means that everyone is looked after through the best social welfare system on earth. This is affordable because of the high-wage, high-tax system and the very healthy economies of these countries. This provides the ideal environment for the nurturing of the individual within community and when help is needed, it is always there. In such an environment, resilience can be greatly enhanced.