Towards a Better World!

Introduction: Suffering and Social Structures

In our complex and often troubled world, millions grapple with exploitation, oppression, poverty, inequality, and illness. These pervasive issues beg the question: what fuels such imperfection in our society?

Religious doctrines have long offered interpretations. Hinduism, for instance, sees suffering by individuals as a consequence of past misdeeds. Christianity attributes it to sin and disobedience towards God, while Islam views it as a test of faith. Buddhism, on the other hand, believes suffering stems from greed, hatred, and delusion, advocating meditation as a path to nirvana.

These perspectives converge on a critical point: suffering is seen as a result of individual actions, with personal effort as the key to overcoming it. While there is merit in emphasizing personal responsibility, such interpretations overlook a crucial factor.

This essay challenges the conventional wisdom by spotlighting the "elephant in the room": the significant role of societal structures in shaping individual experiences of suffering. By examining how the intricate fabric of our social systems contributes to personal hardships, we uncover layers of complexity often missed by traditional viewpoints.

As we embark on this exploration, let us question, analyze, and seek deeper understanding. The insights gained by this exercise may help not only to illuminate the roots of our collective challenges but also to pave the way for meaningful change.

Social Structure: Beyond Personal Morality

The intricate tapestry of social structures, exemplified by systems like slavery and caste, extends beyond individual beliefs. These are not merely roles chosen but are circumstances into which individuals are born, defining their lives in profound ways.

Consider the slave and the slave-owner, roles cast upon individuals by the society they are born into. This division isn’t a reflection of inherent goodness or badness in people. Both communities – slaves and slave-owners – encompass a spectrum of moral qualities. It's not a person’s inherent virtue or vice that destines them to be a slave or a slave-owner; it's the societal framework they are born into.

Viewing slavery simply as exploitation by 'bad' people over 'good' people is a simplistic and flawed perception. The reality is more complex. Each individual inherently possesses a blend of what might be termed 'good' traits (like empathy, selflessness, and kindness) and 'bad' traits (such as greed, revenge, and cruelty). These traits are part of our genetic makeup.

However, it is the social context that plays a pivotal role in determining which of these traits tend to be expressed or suppressed. The social structure we find ourselves in can either nurture our positive qualities or, conversely, bring out the negative ones. In understanding this, we recognize the profound influence of societal systems in shaping our identities and behaviors.

 

The Social Structure We Are Born Into: A Legacy of Inequality and Instability

Our contemporary society, a product of evolution from feudalism and slavery, presents a mixed picture. While it's often argued that we are better off now than in previous eras, persistent problems cast a shadow on this progress.

In every historical epoch, including under slavery, caste, and feudalism, there have been those who fervently supported the prevailing systems. They celebrated and defended these structures, believing them to be beneficial. This pattern repeats in our current society. Yet, alongside these proponents, there have always been critical voices pointing out systemic flaws.

One glaring issue in today's world is the entrenched poverty affecting millions. This isn’t merely an unfortunate byproduct but a direct result of a social structure that distributes wealth unevenly, unjustly, and undemocratically. Those mired in poverty, understandably, yearn for a system that doesn’t perpetuate their hardship across generations.

Another significant challenge is the fundamental instability of our economic system. The US National Bureau of Economic Research highlights a cyclical crisis pattern, occurring every four to seven years on average. These aren’t isolated events but global phenomena, as evidenced by the peak economic downturns in 1929, 1999, 2008, and 2020. These crises result in widespread job losses, not due to poor performance of individuals, but because of systemic failures like reduced demand, leading to factory closures and industry-wide downturns.

These economic crises also strain government resources. With reduced tax revenues from both businesses and individuals, governments struggle to support those affected by unemployment, precisely when this support is most needed.

Many economists view these boom-and-bust cycles as inherent in a market-driven economy, a realization that became more pronounced after the Great Depression of the 1930s. Governments have since experimented with various strategies to mitigate these flaws, which we will categorize and examine in the following sections.

 

The First of the Four Models: The Welfare State and the New Deal

The Welfare State model, inspired by the New Deal in the United States, marked a pivotal shift in economic policy, driven by the theories of British Economist John Maynard Keynes. This approach was a response to the catastrophic effects of the 1929 stock market crash, which led to widespread bank failures, unemployment, poverty, and social unrest in the U.S.

Elected in 1932, President Roosevelt launched the New Deal, breaking away from the era's laissez-faire capitalism and balanced budget policies. He advocated for substantial government intervention in the economy to protect public welfare, influenced by the pressure from various groups demanding changes ranging from socialist revolution to more government assistance or less regulation. Roosevelt's challenge was balancing these diverse demands while averting the extremes of fascism or communism.

The New Deal aimed to provide relief for the unemployed and poor, boost economic recovery and growth, and reform financial and social systems to prevent future crises. Roosevelt persuaded many wealthy corporations to accept higher taxes needed for funding public works and social programs to prevent social unrest. Despite resistance from some others, the New Deal, when implemented, achieved notable successes. It stabilized the banking sector, restored financial confidence, and created institutions like the FDIC, SEC, and the Federal Reserve System. The U.S. saw the establishment of social security and improved conditions for workers and farmers.

In contrast, Western Europe's inadequate response to the Great Depression facilitated the rise of fascism, leading to dictatorships in countries like Germany, Italy, and Spain. The U.S., however, experienced unprecedented economic growth post-New Deal, emerging as a new superpower.

Despite its successes, the New Deal was criticized for not equally benefiting all demographics and not fundamentally altering the capitalist structure. Critics like Richard Wolff propose "economic democracy," with employee representation on corporate boards, and Thomas Piketty suggests a global progressive tax on wealth and income.

The Welfare State's economic success could not prevent cyclical downturns. By the late 1970s, as the memory of the Great Depression faded, many viewed government interventions as hindrances to capitalism's full potential, leading to a shift towards "neoliberal globalism." This deregulation actually contributed to the economic slowdown in the West and to the 2008 financial crash, creating conditions once again ripe for fascist mobilization.

 

The Second Model: Fascism as a Response to Economic Turmoil

Fascism, like the New Deal in the U.S., emerged as a reaction to the destabilizing effects of the Great Depression. However, its approach to addressing the perceived failures of capitalism was fundamentally different. Fascism is underpinned by the belief that capitalism's instability stems from corrupting external influences. The fascist response, therefore, is not to implement social welfare measures aimed at reducing inequality but to purge society of these so-called alien influences.

At its core, fascism seeks to create an environment where private capitalism can thrive unimpeded by what it perceives as the detrimental effects of certain groups. The State's role, in the fascist view, is to identify and eliminate these 'evil elements' from society. Their agenda includes targeting labor unions, immigrants, and any groups believed to disrupt the capitalist system.

Fascism uses authoritarianism, nationalism, corporatism, and militarism to achieve its goals. These methods appeal to some business interests because it divides workers along primal identity lines rather than uniting them around shared economic interests. In modern times, various forms of fascism have emerged as effective movements to dismantle trade unions and to dissolve solidarity among the economically disadvantaged.

Businesses often fund fascist movements, preferring this form of state intervention over welfare models like the New Deal, which aim to reduce economic disparities. Fascism can thus be referred to as "capitalism with an authoritarian state".

Historically, not one among fascist regimes could fulfill the populist promises, despite holding power for decades, in some countries. This failure can be attributed to a fundamental misunderstanding of the causes of capitalism's shortcomings. Even when successfully implemented, fascist policies have been unable to address inherent capitalist flaws such as inflation, unemployment, poverty, corruption, shortages, and inequality.

In contemporary times, the disillusionment with neoliberal globalization has given rise to populist leaders espousing fascist-like solutions in various countries. These developments underscore the ongoing relevance of understanding fascism, not just as a historical phenomenon, but as a recurring, but ineffective and undemocratic, response to economic crises.

 

The Third & Fourth Model: Contrasting Soviet and Chinese Socialism

The evolution of socialism in the Soviet Union and China presents two distinct models, each with its own successes and challenges.

Soviet Socialism: State Capitalism and Authoritarian Rule

Shortly after the Russian Revolution, Lenin characterized the system he oversaw as "State Capitalism," acknowledging that while the state controlled capitalist enterprises, the fundamental employer-employee dynamic of capitalism persisted. Lenin realized that socialism's stability was precarious amidst capitalist rivals. Following Lenin's death, Stalin's tenure was marked by political oppression aimed at preserving this socialist 'island'.

The Soviet model could claim socialist credentials in its equitable wealth distribution and guarantee of full employment. However, democratic control by workers over the state was absent, leading to "Socialism with an authoritarian state." This system achieved significant milestones: lifting millions out of poverty, providing universal education, healthcare, and nutrition, and transforming the USSR into a superpower after World War II. The rapid economic advancement in the early years of Soviet socialism was unmatched.

Yet, when the system faced challenges in the late 1980s, there was a conspicuous lack of public defense for it. This suggests that post-poverty, people's desire for democratic freedoms becomes paramount. The Soviet Union's dramatic dissolution in 1992, with little public outcry, underscored this sentiment.

Chinese Socialism: A Hybrid Approach

China's socialist model is a hybrid, with the state owning about half of the capitalist enterprises and the rest under private ownership but within a framework of strict state regulations. Controlled by the Communist Party, this model is termed "Socialism with Chinese Characteristics."

In terms of rapid economic growth, China's model has equaled or even surpassed the early Soviet experience. Unlike the Soviet Union, China avoided isolationism, choosing instead to engage and compete in the globalized market. This approach, coupled with a policy of not actively supporting international communist movements, has allowed China to become an economic powerhouse, deeply intertwined with global capitalism. A collapse of China's economy could have significant repercussions for capitalist nations.

However, China faces a similar challenge to the one that led to disenchantment in the Soviet Union: political oppression. Questions linger about the long-term stability of a model that limits political freedoms. How long China can sustain its growth under such a system remains an open question.

 

Future Models: Navigating the Piketty and Wolff Perspectives

As we grapple with growing economic inequalities and instabilities within capitalism, the contrasting solutions offered by Thomas Piketty and Richard Wolff provide thought-provoking alternatives. Here's a deeper dive into their approaches and the future implications:

Thomas Piketty's Perspective:

•                Redistributive Focus: Piketty emphasizes wealth redistribution through progressive taxation, particularly targeting the ultra-rich to bridge the inequality gap.

•                Reformist Approach: Operating within the capitalist framework, Piketty advocates for reforms to make capitalism more equitable, rather than dismantling it.

•                Global Wealth Tax: A notable proposition from Piketty is a global tax on capital to curb the disproportionate accumulation of wealth.

•                Data-Driven Policy: His recommendations are rooted in extensive data analysis, reflecting historical income and wealth distribution trends.

•                Preserving Market Dynamics: Despite advocating redistribution, Piketty maintains the core market mechanisms and private ownership inherent in capitalism.

Richard Wolff's Economic Democracy:

•                Worker Empowerment: Wolff champions the direct ownership and democratic governance of enterprises by workers, fundamentally diverging from traditional capitalist models.

•                Transformative Production Model: His approach entails a systemic overhaul of production organization, steering clear of both capitalist and state socialist templates.

•                Collective Decision-Making: Wolff envisages a democratic, collective decision-making process within enterprises, challenging the top-down corporate hierarchy.

•                Production-Focused Change: Unlike Piketty's post-generation wealth redistribution, Wolff's model aims to revolutionize the relations of production at their source.

•                Societal and Political Reform: Wolff's vision extends to broader societal and political reforms, advocating a more inclusive and participatory democracy.

•                Looking to the Future

As capitalism confronts deepening crises, the question arises: will the future lean towards Piketty’s reformist model or Wolff's transformative vision? Both paths require extensive political mobilization, historically driven by profound crises or wars. Today, the world stands at a crossroads, potentially on the cusp of such transformative change.

Exploring Alternatives

Yet, the search for effective and stable economic alternatives continues. Are there other viable models beyond the Piketty and Wolff frameworks that can address the inherent challenges of capitalism without resorting to extremist solutions like fascism, which history has shown to be unsustainable?

The future of global economics may hinge on our ability to explore and embrace such innovative models, harnessing collective action and political will to navigate towards a more equitable and stable world.