The Societies of Haves Less, If Not Haves Not!
Global Financial Meltdown - One Of The Best Financial Crisis Documentary
The world had almost forgotten him, but he was resurrected after the financial crisis in 2008. To Marx and Engels - the conflict was obvious and they asserted that capitalists were digging their own grave and so were going to fall in it inevitably. As a result of crisis - Millions of workers believed to have lost their jobs, not just in America, but around the whole word. The crisis triggered domino-effect, and world economy panicked.
Joseph Stiglitz, the Nobel laureate suggested to change the capital as it is in the present form and went on to suggest western countries to cut on the consumption. Besides obvious cooperation between China and America; there was a rift though as regards with what exactly has to be done to steer the global economy? Americans complained against Chinese habit of saving excessively and asked them to consume more. The very notion; Stiglitz termed as problematic, as he wanted the west to save more and consume less. However, western governments were bent on doing total opposite what Stiglitz was busy in advising.
In contemporary times, it is not even a remote possibility of proletariat getting close to destroying capitalism as its tentacles are spread far and wide. Morse so for reason that there is no alternative to capitalism at this point, furthermore it is been embraced by China and majority of comity of nations all around the world as well. China has come up with its own model of what is known as state-capitalism; now, it is Chinese who are keeping the capitalism afloat by providing means of cheep labor, lower prices and preventing any possible means for worker to organize themselves against ills of the system. As they certainly feel to be less paid and over-worked.
Karl Marx may may have died but his ideas are not yet airbrushed from East Germany; which was a part of Communism from 1953 onward until 1990.. In a survey which was conducted in Eastern part of Germany: 53% of respondents said that market economy was unsuitable. Furthermore 43% wished for coming back of socialist economy.
After the Fall of Berlin Wall
About thirty years ago in a meeting that took place between Iron Lady - the Margaret Thatcher and Mikhail Gorbachev - the reformer of communist party of USSR. After hours of discussion: Gorbachev blamed Mrs. Thatcher of leading the party of haves and of ignoring the party who really run the system of capitalism. She obviously had an answer which came through her writings in a memoir: remarking that she made sure that a society of haves is created and not a class of them. In a way she meant to create an ever burgeoning middle class in the western hemisphere and thus abhorred class consciousness taking root any where in peoples’ psyche.
Perhaps gone are the days when those words carried convictions and beliefs upholding capitalism as the best form of an economic model. Mrs. Thatcher kept saying that “every owner is an owner” and as a result of fall of Berlin wall, there was a euphoria in western nations particularly. Western form of capitalism was the order of the day, besides cajoling ex-communists states to liberalize their economies. To the rest of world and newly independent ex-communist states – capitalism certainly was a dominant theme.
Meantime, anglosphere rose to a new level of confidence after defeating the communism. And those were glorious days for owning stocks and for ever expanding opportunities in doing what one wished as an entrepreneurs. After about 28 years, since the debate between Mrs Thatcher and Gorbachev: the conditions have changed tremendously. And one can not imagine a similar discussion taking place between a western leader and leader of country belonging to anti-western camp; such as Vladimir Putin. Well, there are obvious reason as to why can not it take place now: firstly, there is no clear ideology pursued by either camp or either of them having a conviction to stand by an intelligible ideology.
Do you believe that middle class in western societies is under the squeeze?
The Middle-Class Squeeze
The financial crises of 2008 was epical, as long as one can remember no no western leader since then has gone on to flaunt immaculateness of capitalism and its benefits to society and to nations at large.
At this point, not surprisingly though, long term prospects for middle class seem to be bleak in some way. The percentage of people in Britain and America owning both stocks and homes are well below compared to decades of 1980s. Similarly in Britain, the average age of buying home for the first time by any individual was 27 years of age, that has become 31 years now and that too with the financial help of Mom and Dad. Prices of houses are 15% higher than those were during 1980s, it is been increasingly felt that “Western societies have been societies of haves less, if not haves not”.
Earnings of financial executives in comparison have increased many folds, as tens and thousands are getting six figure remunerations. In contrast during 1980 and around that time; only seven chief executives got six figure salary packages. Middle class has been under pressure to that extent that more and more middle class families now depend upon the income of both mother and father. This was not the case during the decade of 1980s.
Furthermore, it is been realized now that children in U.S and U.K may not lead prosperous life than their parents.Things have been receding and one wonders over the benefits of capitalism; which blesses very few at the expense of large numbers. Indeed the risks of the failing economies have been borne by vast majority of the people. At the same time the notion of owning a property is not so tempting if you know that value of what you possess is knotted by debt and may probably collapse in times ahead.
Globalization, in addition, has not gone on to benefit western societies to the extent that one would have wished to, as service or products that are offered and produced are met with heavy competition from outside. And it is not exciting when foreign workforce immigrate to western countries and take their jobs, besides enjoying welfare benefits, that otherwise would be given to native workers.
Despite being responsible of the financial mess in 2008 – top executives and CEOs did not in any way take less remunerations, in fact their packages were just as same as those were before the crisis. And it is the story around always that profits they earn go global, while their losses are borne by native countries.
Economic Inequality Is Far Worse Than You Think
Chris Rock remarked candidly in an interview that, if poor knew how much rich people are rich, there would be riots on the streets. We have no idea how unequal American society has become.
Micheal Norton and Dan Ariely in 2011 paper analyzed the beliefs of more than 5000 people about the issue of wealth inequality. They divided American population into five equal portions, while respondents were supposed to reply for percentage of wealth possessed by each of the one fifth of population. The respondents gave their verdict saying that richest fifth possessed only 59 percent of the wealth; in contrast the bottom forty percent has a hold over 9 percent of country’s wealth.
Not surprisingly perhaps; reality was shockingly different as despite having a pessimistic view point about wealth distribution, they got it wrong. Just like them, It would have been surprise to many after learning that top twenty percent of the American households has a control over 84 percent of wealth resources; while bottom forty percent have possession of meager 0.3 percent. These data show nothing but a sinister system and its continuity in the manner that it is having at this point in time in the history of the world.
According to research conducted by PEW, the American asserts that country’s economic model leans hugely in favor of rich people. However, sixty percent of respondents maintained at the same time that those who have will to work hard can go on top, despite system being unjust and patronizing. However, bitter is it to some people but America is now most inequitable nation of all the western nations. So much so that there is less social mobility in comparison with Canada and Europe; this is shockingly astounding for a country such as America.
Labor party of Britain that won three consecutive elections have chosen Jeremy Corbyn; who does not hide his intended goal of ending capitalism. It is not a secret that just few months ago, there were hardly any chances of him being elected.
Karl Marx Theory
Karl Marx on Capitalism
Karl Marx said in his Communist Manifesto: “The executive of the modern State is but a committee for managing the common affairs of the bourgeoisie.” He claimed that: capitalism would only create two classes - one would be the rich bourgeois and other would be poor working labor class of proletariat. Bourgeoisie are in control of capital and productive forces thereby impoverishing proletariat further. So there would be little doubt that, In the end whole system would be over thrown by dictatorship of proletariat.
However on the contrary, much to the dismay of some aspects of theory; bourgeoisie mushroomed into becoming so large that politicians refer it as middle class. As would a bourgeoisie of Karl Marx would refer to labor class of the day. It would not be unjustified to conclude that the ever shrinking middle class in western societies seems to find itself trapped in to tentacles of the very system that it once assisted to create. The most abominable outcome of the system is that it makes rich more richer and poor more poorer.
Joseph Stiglitz has posited in his book that financial marketers acted with lack of morality and greed. And this trend does not seem to stop; thus consequently trust has been broken between people and the markets after what is deemed as a compromise between money and morality. It would not be wrong to conclude that the very essence of economic middle class order depends upon such a vital form of trust; and that morality can not be divorced from financial sphere.
The present day middle-class could be labelled as ‘mass bourgeoisie’, that both Engels and Marx would have seen as contradiction in terms, ass it was proletariat class which was mass in number. This mass bourgeoisie has in last decade gone on to street to protest against governmental austerity measures, in countries of Eur-ozone. Paradoxically, despite such measures the debt remains remarkably high. And it is often a recurring probability that whole Eur-ozone could one day collapse. But luckily unemployment in both America and Britain is low against most of the countries of Euro-zones.
How should the developed world come out of convalescent ward? One of the ways would be to address the issue of cheating within markets. For markets, where it takes place is not a market at all. Furthermore, it is troubling to find those who are owned by shareholders do not work for them and why can not political parties take effective measures to change this trend by offering tax benefits?
Baby boomers like to spending their savings unwisely; in fact they should play their part in advising people to save more. But it should also be brought here that people find themselves increasingly of not trusting of what is going to happen to their savings? Therefore, savings need to be protected by long term plannings of governments, which is not the case in most of western countries.
it is imperative to balance national and global, thus national governments should not be too much swayed towards internationalists' view. Who favor global trade at the the expense of national and posit that age of nation state is certainly dead. Which is not true at all as nation state would continue to be a ruling factor in international politics. In addition rule of law and democracy are underpinned by nation state, so if authorities of nation states are undermined - the trust of citizens is undermined.
No wonder that Adam Smith well understood this dichotomy and instead emphasized to 'wealth of nations'. Globalization would succeed if each village is prosperous and its people have considerable control over the resources that they own, and people are given freedom and control to guide their destiny. Therefore, it is crucially important to restore this balance between national and global economies.
It is undeniably true that it is the middle class which fuels and run the engine of the economy. Therefore, the longer it remains under the squeeze or in stagnancy the gloomier would be prospects for economies of western nations. Something of a paradigm shift has to have happen in the corridors of a power; Joseph Stiglitz said that we should change the capitalism in the present form, perhaps it is time to do something of that sort. The governments should take steps to ameliorate the squeeze by providing middle class affordable education, health care system; housing and on top of all the opportunities of employment.
Again from Karl Marx's theory there is an obvious conclusion about the capitalists have inordinate control over the wealth of nations, so its them who get to decide where wealth should be invested. Whereas those who labor are left in limbo; it is pivotal that this trend be reversed, if there is any intent to reverse what has happened in couple of decades, and if we don't continue to become societies of haves less if not haves not.