Capitalism is one of the strongest transformational forces in the world. It has changed the face of the globe to one where poverty has been decreased and scarcity has diminished. As a philosophy and economic model, it has evolved and matured in response to its effects.
It encourages competition to ensure healthy market forces giving the best, most efficient solutions the most traction. This creates a virtuous cycle that self-propagates. One of the side-effects is widening income coefficients that leave large portions of society behind.
The system evolved a conscience to address this imbalance through social upliftment and impact investing.
We are approaching a pivot point.
By giving handouts to people left behind by a system we designed we are creating an artificial slavery that keeps people who cannot figure out the rules to the game in bondage. When we aggravate this on a global scale, this happens to nation states. In a closed loop economy such as the global one, total output equals total input. On balance that seems fair, in reality, some governments run on positive trade balances and others on negative.
Negative trade balance countries are spending more than they earn, this forces them into debt and trade deals that keep them afloat in the short term, but bonds their balance sheet for all eternity, ie. slavery.
The only way to address this is by ‘social investment’ from countries with positive trade balances. This keeps receiving countries at the mercy of benevolent donors.
Global capitalism in its current form will only survive when countries all have a zero trade balance. Any profit for any country creates a loss for another.
Until we come up with a new solution, countries are competitive forces trying to beat the competition to secure the future for their citizens. If they feel like it, they might offer some of the spoils back to the countries they profit from.
Capitalism requires the potential for profit. In a closed system, that necessitates loss.
Let’s create sustainable win-wins instead.