The stark economic reality has even sidelined the annual Davos jamboree: US$ 8 trillion has been pumped into world financial systems; banks and a large part of the West’s auto industry have been nationalized; interest rates have been cut to virtually zero – the lowest levels in history; unemployment is still rising rapidly and there seems to be no end to the negative legacy of capitalism.
“The proposed nationalization of telecommunications really is the last straw! What is this idea of giving everyone free access to broadband but socialism by another name?” fumed an Economist editorial last week.
In essentially stagnant economies individuals have clamored for someone to “take charge” and “create some sort of stability.”
This has given Western governments plenty of reasons to take control – a solid reason for the ‘right’ to take power from the ‘left’ – and it hasn’t been all bad.
It was a succession of well-meant bail-outs that started the ball rolling in 2008. First it was failing banks world-wide, then the crippled automotive industries in the US, France and Germany.
Finally governments took back much of the infrastructure that had been privatized over the past decades, allegedly to reduce costs such as rail fares and road tolls for consumers.
Mobile networks and Britain’s BT were nationalized too, but not for financial reasons. Governments said they wanted to give everyone access. This started the de facto ‘Socialism of Technology, Communications and Banking’.
And here’s the rub, consumers have never had it better.
Government takeover of digital networks, effectively made personal communication a basic human right, along with banking. It’s cheaper to use rail, road and air transport today – all of it was already commoditized in any event.
Wherever you look, out of the chaos, entrepreneurship has blossomed. The opening up of networks and banking to everyone has proved a massive economic boon.
Chinese and Indian markets that fared rather better for the first year of the depression, are now facing increased competition from the West, for the first time in almost a decade.
The socialistic initiatives taken by Western governments during the financial crisis have somewhat surprisingly created a new infrastructure for personal growth and bottom-up competitiveness – literally a more holistic capitalism.
Perhaps what is being touted as ‘New Socialism’ is becoming a kind of Economic Humanism.
Whatever you choose to call it – you can’t deny that it’s working.
ANALYSIS >> SYNTHESIS: How this scenario came to be
Capitalism is the economic system in which the means of production are owned and controlled by private entities for profit, rather than by the government. A capitalist political system protects the exchange and distribution of capital between openly competing profit-seeking legal or private persons and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a market economy in which anyone can participate in supply and demand and form contracts with anyone else, rather than by central economic planning.
Capitalism is originally defined as a mode of production, where it is characterized by the predominant private ownership of the means of production, distribution and exchange in a mainly market economy. Capitalism is usually considered to involve the right of individuals and businesses to trade, incorporate, and employ workers, in goods, services (including finance), labor and land. In modern “capitalist states”, legislative action is confined to defining and enforcing the basic rules of the market though the state may provide a few basic public goods and infrastructure
Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production and distribution of goods, and the creation of an egalitarian society. Modern socialism originated in the late nineteenth-century working class political movement. Karl Marx posited that socialism would be achieved via class struggle and a proletarian revolution which represents the transitional stage between capitalism and communism.
Socialists mainly share the belief that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and creates an unequal society. All socialists advocate the creation of an egalitarian society, in which wealth and power are distributed more evenly, although there is considerable disagreement among socialists over how, and to what extent this could be achieved.
Humanism is a broad category of ethical philosophies that affirm the dignity and worth of all people, based on the ability to determine right and wrong by appealing to universal human qualities, particularly rationality. Humanism can be considered as a process by which truth and morality is sought through human investigation. In focusing on the capacity for self-determination, humanism rejects transcendental justifications, such as a dependence on belief without reason, the supernatural, or texts of allegedly divine origin. Humanists suggest that solutions to human social and cultural problems cannot be parochial.
2008: The world economy turns to jelly
You lived through it – we don’t need to re-iterate the depressing statistics.
2009: Turning economic crisis into hope
President Obama turns the crushing economic downturn from a crisis into a hopeful age of sustainable development – creating a new capitalist/socialist partnership.
The mood of the US turns from personal consumption and eternal credit to one of public investments and community contribution – country before self, at least some of the time!
Infectious optimism spreads to Britain as the government announces the ‘Digital Britain’ initiative that will give everyone free broadband access from 2012. First discussions start on nationalizing the transport infrastructure too.
Technology becomes core to the ‘new socialism’ as governments take control of the basic infrastructures (such as communications and banking) and make them ubiquitous. “We could call this ‘human capitalism’,” quips one government minister.
2010: Energy, Climate, Food and Water are the focus
Massive government investments in the US, Europe and Asia ensure that these are the industries that create the most jobs and new wealth.
2011: Telecomms ‘nationalized’
Mobile phone network provider Vodafone announces that it will focus solely on ‘value added services’ and leave the unprofitable infrastructure business to government.
British Telecom is the last ‘national’ provider to give in to the ‘socialism of technology’ making personal communications a basic human right.
All Britons will have free broadband access by next year.
2012: Auto industry recovers
Real growth emerges for the first time in five years – but it’s not what we might have predicted.
Alternate fuel cars and small, nimble marques take to the front. Two American manufactures become the darling of investors but the European car industry continues its move to China with massive job losses in the EU.
Chinese auto makers are consolidating at a furious pace and the top two alternate fuel brands are now Chinese.
Chinese car production and sales are now expected to represent 50% of world numbers by 2020.
2013: Technology core to New Socialism
It has become clear that government investments in technology and infrastructure have become core the emergence of the economic success.
“Everyone is fully connected with everyone else. Everyone has a bank account. The basic human rights are being delivered. There is simply no reason for you NOT to be part of the new economic upturn. Our new ‘human economics’ has linked America back into the world. If you’re an American you can no longer think of yourself as a Have-Not – if you’re not growing and developing then you’re a Want-Not, and it’s your own fault,” said President Obama speaking to Larry King.