Capitalism: A blessing in disguise

Published: September 15, 2012
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It is evident that the real beneficiaries of capitalism — a system often derided as being predatory, greedy and crony, by old-school revolutionaries — are the citizens of the emerging economies. PHOTO: REUTERS

The word ‘capitalism’ — or sarmaya darana nizam’ — has always had an unpleasant ring to it in Urdu language newspapers. That’s probably why one rarely finds a politician in Pakistan praising capitalism.

Even our public intellectuals tend to carefully add qualifiers such as economic justice and social equity while calling for a free-market economy. However, shouldn’t the centrally planned economic system, rather than capitalism, stand discredited after the collapse of the Soviet Union in 1991? After all, capitalism has lifted millions of people out of poverty since its concluding triumph over socialism two decades ago. A cursory look at growth statistics reveals the unprecedented expansion that capitalism has caused in the global economy.

Between 1990 and 2010, the global GDP increased from $22.1 trillion to $62 trillion while emerging markets accounted for over half of this worldwide growth. Calling it the largest economic expansion in human history, political analyst Fareed Zakaria argues that it was actually spurred by a huge movement of western capital to Asia and all over the globe.

One has to be utterly biased to deny that the unhindered movement of capital and transfer of technology across borders — two of the many features of capitalism — have facilitated the entry of roughly two billion people into the global economy as active participants.

Most of these people belong to the emerging markets which, until a few decades ago, had dysfunctional, centrally planned economies, such as China and India. Against this backdrop, 100 per cent of global growth in 2009 came from the same emerging markets, according to the International Monetary Fund (IMF).

It is evident that the real beneficiaries of capitalism — a system often derided as being predatory, greedy and crony, by old-school revolutionaries — are the citizens of the emerging economies. According to the September edition of Finance and Development, an IMF publication, per-capita income in emerging and developing economies has grown almost three times as fast as in advanced economies during the past two decades. After the global economic slowdown in 2009, the emerging markets and developing economies recovered with a growth rate of six per cent in 2010 compared with just 2.3 per cent for advanced economies.

“The inherent vice of capitalism is the unequal sharing of blessings”, said Winston Churchill, but “the inherent virtue of socialism is the equal sharing of miseries.”

It’s up to us whether we want to share blessings or miseries.

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Kazim.Alam

Kazim Alam

The writer is a business reporter for The Express Tribune.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • http://lonepkliberal.wordpress.com Loneliberal PK

    It’s nice to see someone speaking up for capitalism for a change. It’s become an irritating trend to bash capitalism for everything from hunger in Africa to the mustard stain on one’s shirt.Recommend

  • Gary

    Not sure if economic fate of the countries is determined by it’s geography or culture or any ism’s. There is a growing evidence that shows countries escape poverty or prosper only when they have appropriate economic institutions, especially private property and competition. Countries are more likely to develop right institutions when they have open pluralistic political system. The openness of a society, it’s willingness to permit creative destruction, and rule of law appear to be decisive for economic development. Recommend

  • MonsieurCritique

    Capitalism is a bad system that is better than all the other systems.Recommend

  • Sry

    No country in the history of the world has developed under “free market” capitalism.
    Britain, the most powerful country in the world in 19th century, was also the most protectionist. Don’t believe me? Look it up.
    The USA’s political and economic ascendency also owes almost nothing to laissez faire and more to isolationism and barriers to free trade in the late 19th and early 20th century. The reason the US emerged as the most powerful nation in the world after WWII was because of the New Deal i.e heavy government spending.Recommend

  • Awans

    Those who equate European Countries as Capitalist are pretty much Ill Informed. With due respect I beg to disagree. Apart from America which is slowly moving towards Socio-Capitalist type government by Introducing Health Care reforms all other countries according to my knowledge are not Pure Capitalists. Do you know European Countries are Socialist+Capitalist at the same time. I will give you an example of UK where Jobless are given job benefits. Does this apply in any Capitalist regime?. The best example of Socio-Capitalist country is Germany where Education is free for everybody, Health care benefits are at a very cheap price and for everybody, Govwernment gives money to every born child on German soil and all jobless is given social benefits as well. Recommend

  • The author seems to be confused about the difference between socialism and communism. Socialism is capitalism with very high taxes and as a result very high government benefits. Communism is government control of everything. The world’s happiest people, according to research, tend to live in the socialist countries of northern Europe (Sweden, Switzerland, Norway, Finland, etc.)Recommend

  • Moz

    @…:

    Sweden and Switzerland are not socialist. They have among the freest economies. And the only reason countries like Germany or Sweden are doing better is because they have capitalism. They don’t allow unions, they are low on regulating private sector, lesser government. Recommend

  • H4N1

    ‘Capitalism has lifted millions of people out of poverty’

    And thrown billions into it.Recommend

  • Faaltu mein khwam kha

    as someone rightly said-capitalism is an unequal sharing of wealth,while communism is equal sharing of miseries…..Recommend

  • abhi

    If you have to quote Churchill to support your argument you should know that it is bad argument.Recommend

  • http://www.scribd.com/asifameer Asif

    Wait.. I thought this was Creditism…

    Capitalism died in 1913. Long live Capitalism…Recommend

  • Nagpuri

    Only thing worse than being exploited by capitalism is not being exploited by it at all.Recommend

  • Abdullah Ansari

    Capitalism: “Where everything is for the rich and nothing is for the poor”Recommend

  • http://www.costume-ideas.com/ Masken

    “Between 1990 and 2010, the global GDP increased from $22.1 trillion to $62 trillion while emerging markets accounted for over half of this worldwide growth. Calling it the largest economic expansion in human history” One is for sure, there is no endless expansion. Recommend

  • Intelektual

    Y the need to confirm to One form of “ism” When the fact is that most economies are infact hybrid y is there a need to defend/Advertise Capitalisim. In its Pure form Capitalisim do have disadvantages the main one being the focus on Numbers and Money alone ignoring the Human element as can be seen with most examples above ! Those are only what Urdu’s “Sarmayadarana nizam” point to.. A free and fair market regualted not by Buisinessmen but the consumer is the norm now y still an argument on Clasical standpoints.Recommend

  • Abid P Khan

    @Abdullah Ansari:
    Capitalism: “Where everything is for the rich and nothing is for the poor”
    In Capitalism, there is far greater lot for the poor, misery, hopelessness.Recommend