Back in the 50s through the 80s, the world was simply divided into 2 spheres. One is free and one non-free. Of course the word ‘free’ was coined by the West to show its superiority and its better appeal. The eastern block of communist countries like to use words like ‘people’ and ‘democratic’. Example is People Republic of China and Democratic Republic of Korea.
During the early 1900, communism, with it strong egalitarian socialistic principle was gaining popularity in a period of turmoil, desperation and frustration between the poor and the rich landlord class in many part of Europe and Asia. The ideals are very noble. All men are equal and all work for the benefit of the states. The state plans and allocates the use of labour and resources. The state in return take care of all it citizens for food, health, education and housing. It became very popular with the poor and the peasants. This gain momentum after WW2 with China and many Asian countries espoused communism.
On the other hand, the West, USA and Western Europe believe in free market. All enterprises and properties are privately own. The state will have minimum interference. Market is a function of demand and supply. Allocation of resources will be based on this principle. Individual has the right to choose and meritocracy is the order. And it is believed that this system is more efficient and better in resource allocation and wealth creation. In US, citizens are responsible for their own food, health and housing. In Europe, it is moderated where the state assist in area of health, education and some basic welfare. This system is widely adopted in most part of the world like Singapore.
The profound difference is the political system. The free world had elections periodically to choose it leaders while the communism countries, the citizens do not have this luxury. It is dominated by the communist party members that govern mostly with iron hand and no dissent is allowed. Individual right and freedom of expression is nonexistent. As mentioned earlier, all enterprises in communist countries are state own, whereas there are privately own in capitalist states.
Looking at my country, Singapore, many enterprises like power, water, telecommunication, hospital, transport and properties are wholly or partially state owned. Does that make Singapore a communist country? The citizens pay for almost everything at market prices. And many enterprises and properties are privately own. Does that make Singapore a capitalist country? Some say this is socialistic democratic. But whatever we call it, what is more important is, have this system imperil or failed us? Where will Singapore be today if we are like china or we adopted the American system? In fact the Chinese has tried to emulate the Singapore system.
Communism has failed because it has lost it appeal and has been found to be unworkable as human being is never altruistic. The present economic crisis has also exposed the flaws capitalism. A lot of questions have to be answered. Do free market principles still relevant to this globalised world with news and information movement at the finger tips? The people of the world are more educated too. Skills and talents are no more limited to the developed west and is easily source globally. Movement of capital and resources move seamlessly across continent with modern transport system.
Free market principles will always be relevant. Except this time, the proponent of free market principles may be haunted by what it promotes in the past. Why a car mechanics in Thailand should be paid only 10% of what his counterparts earn in the West. Why should a factory workers in Vietnam or China are paid peanuts doing the same jobs. Since market forces will determine the best use of resource and capital, more jobs will be lost in the West. But when this reality bites, will the west change the goal post to suit its own interest. There is a very great chance; trade protectionism will be in favour among the western politicians trying to look after their constituencies.
Something I feel may be plausible. We may be moving into a period of ‘global wealth redistribution’. The west has exploited the rest of the world for far too long. It started with the ‘Opium War’ when the Chinese is forced to buy opium in the guise of free trade under the cannons of the English Navy. Also the west has been living beyond their means through easy credits. The west dominance of technology is about over as the rest of the world has caught up. The days of cheap raw materials and resources too are numbered as demand spike up as other countries like China, India, Russia and Brazil develop. As such, the west can no longer monopolised on technology and dictate it trading rules to the rest of the world.
Under the capitalistic system, wealth will always be limited to few. The income gap between the rich and the middle class will widen. With high employment rate, there will be too many poor with no social help from the government. When this happen in a democratic country, politicians cannot ignore the needs of ordinary people in a ‘one man one vote’ system. There is no way the present form of capitalistic system can benefit the majority of the people. Inevitably, the US will have to reform the present free market system.
The US can make reform to its own system but this will entail a lot of painful decisions. Or it can change or reform the trading and market system of the rest of the world to minimise its own pain. I personally think the US will find it convenient to do the latter. It is indeed ironic that China is moving away from communism and eventually US will also move away from its form of capitalism.
My point is, capitalist is definitely not having the last word and communist may be having the last laugh even though it is dead. This global economic crisis will definitely bring about a new economic and political order. Nobody knows how this will evolve.
--------------------Living to see the world---------------------
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