Capitalism is great. Capitalism is flawed. Both is true.
Capitalism has been one of human civilization’s biggest success stories. Over a comparatively short amount of time, this economic system has improved the living conditions and opportunities of billions, created wealth for hundreds of millions, fostered stable democratic societies all over the world, and eventually (and likely not coincidentally) overlapped with a comparatively extraordinary period of peace (in historical context), dubbed “The Long Peace” by author Steven Pinker.
Capitalism also is causing humanity and the planet a fair share of headache. Growing inequality which leads to a shrinking middle class, to polarization and the dismantling of public services and the public good (recommended longread), the increasing influence of corporate interests on politics, massive tax evasion, the externalization of costs, the destruction of the environment as well as the often culturally insensitive export of Western (capitalist) values to and short-sighted exploitation of other countries (with various undesired consequences) are some of the issues that nowadays are hard to ignore.
These two paragraphs are not contradicting each other. They are both true. However, most debates about the state and future of Capitalism suffer from people’s tendency to pick one narrative and ignore the other. Often when people discuss the topic, the exchange quickly turns black or white.
On the one side you have unswerving pro-market optimists who can be recognized by their frequent references to little charts and graphs showing how on average, everyone’s life has gotten better (which is true). Their mistake is to see everything as a math problem and to only consider economic statistics, not the human condition and emotion. On the other side you have the critics who blame all the bad things in the world on capitalism, but who somehow manage to miss how everything described in the first paragraph also is a direct consequence or at least related to the rise of Capitalism.
Fixing the flaws of Capitalism is necessary. Many of the current political and geopolitical events and developments do not fit to Capitalism’s promise and previous track record of constant growth and steady improvement for everyone, which is supposed to turn people into optimists who expect a better future and act accordingly. At least in the Western world, pessimists abound, with already now concerning outcomes and noticeable stress being put on existing political and civil systems. That’s a clear sign that the Capitalist system needs an upgrade.
Unfortunately, thanks to the widespread inability to handle and accept two narratives about Capitalism simultaneously, removing the flaws of Capitalism and performing that upgrade is difficult. The believers want to protect their ideology of choice from any significant adjustments, and the anti-capitalists are longing for something entirely different, rejecting the basic principles of globalized market economics and profit seeking.
Therefore we are not really moving. Capitalism remains in its flawed state, the cracks in the wall keep growing, and debaters and policymakers are mostly occupied with dealing with the effects of all of this. And of course with defending their ideology.
But moving forward is possible. It initially only requires one thing: Accepting both that Capitalism is great, and that it needs to change in order to be fit for the 21st century. As everyone might have understood by now, this century doesn’t look to become a sedate one. Navigating through it with an economical system that is optimized to reduce polarization, tensions and conflicts as much as possible should be a first priority, shouldn't it?
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