Author: Mohammad Asem Esmailzhi
Capitalism (part 14)
How Does Capitalism Affect People’s Lives?
If—God forbid—you are experiencing a difficult life, facing serious financial problems, and dealing with a domineering employer who possesses great wealth and behaves as if the world were his personal throne, then you may be considered one of the victims of the capitalist system.
The type of impact capitalism has on your life largely depends on whether you are a worker or an employer. For someone who owns a company and hires other employees (in reality, workers), capitalism may seem reasonable and even attractive. The more profit a company earns, the higher the wages of workers are expected to become, which in theory should improve everyone’s standard of living. All of this is based on the principle of supply and demand.[1]
However, the problem is that many capitalist bosses are not skilled in sharing wealth. Some even avoid paying workers their normal wages, let alone offering bonuses or additional benefits. For this reason, many people view capitalism as a major source of social and economic inequality.
In fact, one of the main slogans associated with capitalism is that “greed is good.” From the perspective of capitalists, greed encourages higher profits and stimulates innovation and product development. This means that for those who have the ability to purchase, more choices and goods become available.
Opponents of this system, however, argue that capitalism is inherently exploitative. According to them, it creates a harsh society in which the working class is oppressed for the sake of filling the pockets of the wealthy.[2]
Factors Behind the Emergence of the Capitalist System
The formation of capitalism can be traced to several historical factors:
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The transformation of cities into centers of economic activity and the occurrence of the Crusades in the 11th century helped expand industry and international trade.
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Certain exceptions made by the Catholic Church regarding the prohibition of interest created opportunities for raising financial resources to support commercial and industrial activities.
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The great maritime discoveries of the 15th and 16th centuries, along with the transfer of gold and other precious metals from the Americas to European countries, increased profits and created stronger incentives for commercial and economic activity.
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The emergence of Mercantilism in the 16th century, which presented trade as the primary source of wealth and offered guidelines for economic activity, helped create an intellectual environment that pushed commercial capitalism toward colonialism and exploitation.[3]
Why Capitalism Continues to Exist
Despite its serious weaknesses and criticisms, the capitalist system continues to exist today. Although it may appear to be moving toward a stage of crisis or failure, it still maintains a relative presence in the global economic order. Some observers even believe that in the future it might face a fate similar to that of Communism, which eventually collapsed in many parts of the world.
However, two main factors explain why capitalism has survived until now:
First factor: the protection of the interests of various economic groups. These groups, whose benefits depend on the existing system, strongly resist any changes that might threaten their economic advantages.
Second factor: the persistence of certain ideas and theories among intellectuals and theorists. Many of these thinkers are deeply committed to their economic theories and oppose changes or revisions that might contradict their established views.
Together, these two factors have allowed the capitalist system to maintain its stability despite its contradictions and shortcomings. Nevertheless, it is possible that future developments could bring significant transformations to this system—just as major changes occurred in communist systems during the late twentieth century.[4]
Continues…
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References:
[1]. Hoppe, Hans-Hermann, Aristocracy, Monarchy, Democracy: A Tale of Moral and Economic Folly, p. 432. Translated by: Soleiman Abdi. Tehran: Donya-ye Eghtesad Publishing, 2017.
[2]. Zivdari, Mehdi, The Conflict Between Faith-Based Ethics and Capitalist Ethics and the Formation of Economic Systems, pp. 572–573, 579. Sharif University of Technology Center for Technology Studies, 2007.
Also: Sen, Amartya, On Ethics and Economics, pp. 643–644. Translated by: Hassan Fesharaki. Tehran: Shirazeh Publishing, 1st ed., 1998.
[3]. Heilbroner, Robert, Capitalism in the Twenty-First Century, p. 131. Translated by: Ahmad Shahsa. Edited by: Afagh Abedini. Tehran: Scientific and Cultural Publishing Company, 1998.
[4]. Braudel, Fernand, The Dynamics of Capitalism, p. 340. Translated by: Mehran Payandeh, Abbas Khodaqoli, and Naser Kafaei. Tehran: Ameh Publishing, 2009.
