In Search of New Paradigms of Development

| June 1, 2014 | 0 Comments

capitalism crashWe are all in the stalemate of global finance capitalism. The present-day crisis is not only political and financial, but also a crisis of the concepts of human development. History has it that an economic system either differs significantly from its theoretical model, or is similar to it just for a short period of time. The aim of this article is to explain the fails of capitalism and socialism and to outline the main points of a possible new system that will ensure social stability and prosperity.

Capitalism and socialism – why they failed?

The capitalist model is exhausted. Competitive markets that used to be a distinctive feature of capitalism are becoming a part of history as long as monopolists find political ways to ensure their dominance on the market, such as controlling the access to cheap credit. What is more, in finance capitalism money is not only a medium of exchange, but also a commodity that can be sold. This is how money is made out of nothing. In modern-day capitalism big players do not work to earn money. They make money through stock exchange games that are made to look as if they are not frauds.

Socialism failed in USSR and the Eastern Block countries because, as we have already stated, the leaders after Stalin’s death decided building a fully-planned economy without having the technical premises for that. The socialist system gave access to free education and medical care but at the end of its existence, it failed to satisfy consumer demands. Furthermore, instead of creating a classless society, the authorities of the Eastern Block countries grew bureaucracy with a specific hierarchy among the clerks. After the fall of the Iron Curtain, Eastern European countries became economic appendages of Western Europe and USA that are deprived from their own industries and serve as a workforce source.

Steps towards the future – possibilities and problems

With the deterioration of the financial crisis, the fast growing economies of Asia are having a hard time. As consumption will continue to fall, China’s growth will be impeded. Along with that, the improvement of China’s standard of living will stop. In order to prevent social unrest, China will have to turn to planned economy at least for those industries that will ensure the supply of the population with food and other necessities. As we have already stated, the growing computing power will ensure pretty accurate production plans. India will have to do the same as China because the crisis will impede its growth, too. Russia will be interested in accurate planing not only because of the crisis. Russia’s vast territories and cold climate have always lead to development inequality among its territories.

So, there is a number of countries that will be seeking ways to use resources reasonably. Of course, planning is impossible for all branches of economy. You can hardly plan fashion, for example. There are many consumer goods the production of which is almost impossible to plan. Planning is something that should ensure social stability without affecting versatility on the markets.

The problem of the parallel existence of state enterprise and private sector is that bribing officials remains possible, which means that state resources can get robbed by private parties. The electronic planning system should be good not only at planning, but also at surveillance in order to track money flaws.

Instead of a conclusion, we, Bitter Bananas, want to remind you that the technical prerequisites for a more developed economy and society are nothing if the new generations are not brought up properly in order to use them reasonably. We need to revive the system of values that used to work for centuries and was recklessly destroyed by liberalism. Only then new paradigms of human development are possible.

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