The One Major Flaw in Capitalism

Ageing and obesity plague China - Aljazeera.Net, 21 August 2006

China is facing the prospect of an increasingly ageing and obese population that could adversely affect the country's economy, according to new reports.

A newspaper report on Monday blamed the Communist government's one-child policy for labour shortages that could undermine the so far endless supply of cheap workers that has underpinned China's extraordinary economic boom. A report, produced by the Chinese Academy of Social Sciences, a top government think tank, said industry had yet to face up to the fact that incomes have not risen fast enough to support pensioners.

“In the not too distant future there will be a day when there is an end to the unlimited labour supply,” the state newspaper which quoted the report, the China Youth Daily said. “It is this that had been one of the most basic advantages of China's recent economic development.”

Family planning policies started in the late 1970s have prevented the birth of hundreds of millions, and signs of possible problems in the future can be seen in economic heartlands in Guangdong and near Shanghai where factories are already finding it hard to get workers.

Capitalism, the best economic system the world has ever created, has, in my opinion, two major flaws. One is the flaw that every socialist agrees on, that capitalism has no heart. It can stomp all over the poor, the weak, the homeless, and the ill-equipped. It will also, left unregulated, lead to pollution, unnecessary danger, and fraud. It is basically a dog-eat-dog, survival of the fittest system. Don’t get me wrong, I’m in favor of capitalism. It’s the only system that leads to economic prosperity. It just needs regulation and incentives to work for all the people, and for Mother Earth.

The second flaw of capitalism, though, is one that only I see, as far as I am able to tell. I’ve not noticed any economist, socialist or capitalist, who will bring this up. It has to do with capitalism’s need for population growth. The big word in any economic report, whether it be that of a company, or of a country, is growth. Economies always have to be growing. GNP must be rising. Profits must be rising. A large component of growth, aside from productivity increases, comes simply from growth in population. GNP will rise as the population of a country rises. Profits will rise as a company enlarges its customer base. The more people, the better.

Now, two “nations” have been having their “problems” with population growth, China and the European Union. China imposed their one-child rules in order to stem population growth. It was their solution to one billion people. The unwanted side-effects, besides the ungodly invasion of privacy and dignity, were the murder of female babies, since males are favored over females, and now this trouble for China’s labor force. China has successfully transitioned, like few other nations, from communism to a form of capitalism. Their success, though, has been largely based on their supply of cheap labor, now threatened.

Europe has had a similar problem. Europe’s declining population growth, though, came from the “middle-class syndrome.” This is the seemingly natural phenomenon where upper income families have fewer babies than the lower classes. The same thing happened in the United States.

The U.S. solved its cheap labor problem through increased immigration. The capitalistic beast is fed by the honest labor of Mexican illegals. The result for the United States is a booming economy, but all the problems of a foreign invasion—including loss of jobs and wages for Americans, and the creation of a bilingual nation. In Europe, they solved their cheap labor problem by importing millions of Arabs. The problems for Europe include an ever-increasing Muslim population that will one day change Europe into a fundamentalist Islamic “nation.” The Muslims in Europe already have so much political power that they are able to affect national decisions, like whether to enter the war in Iraq, policies toward Israel and Palestine, Europe’s attitude about America, and even its feelings for George W. Bush.

Capitalism can be given a heart, through watchdog policies and regulation. The need for population growth and cheap labor is another matter, though. This is my one major gripe against capitalism. I think population growth should have a limit. I believe too many people drain the world’s resources, lead to pollution and overcrowding, clog our freeways, and will one day lead to a disaster, like when there is a world drought and millions will starve. The need for cheap labor also drives countries like America and Europe to rely on rampant immigration for growth. This unruly immigration does not allow for assimilation. Thus, America is bilingual, and Europe is bicultural. The unintended results are, Mexicans will take over the United States politically, and Muslims will do likewise in Europe.

My solution? My solution will never happen. It goes against nature, and capitalism is so very natural. My solution is to accept a lower growth rate in the economy. I suggest that we limit our growth aspirations in the economy to that part of growth which will come exclusively from productivity gains. Forget about population growth as an engine, and cheap labor. Give up this part of capitalism. Yeah right. And bluebirds will turn back into dinosaurs. I’m not dumb enough to imagine this will ever happen.

So, America will become a Mexican nation, and Europe will become a Muslim nation. China will just pass a law to start having babies again. And the world will grow and grow and grow, until the day our rivers turn black, and traffic on our freeways will start to go backwards.

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