Global capitalism in crisis: Going back to the drawing board

TEHRAN, Nov. 12 (MNA) -- The complex interplay between ethical and economic issues has become a matter of intense debate these days in the Western world, as the rage and contempt for the corporate “greed” and growing “income inequality” perpetuated by the financial industry and large corporations have led to a social revolution of sorts. Economists have reported that income growth in the United States has been concentrated at the top of the scale in the past three decades. The share of total income going to the top 1 percent of earners, which was less than 9 percent in 1976, surged to nearly 24 percent by 2007. During the same time, however, the average inflation adjusted hourly wage declined by more than 7 percent. In short, the rising income inequality has done a great deal of damage across the income scale. Hence, the rise of the Occupy Wall Street (OWS) movement, which is gaining traction as a social movement, while assuming the form of a general strike and civil disobedience. The reach of this “occupy movement” is extraordinarily wide (from Puerta del Sol in Spain to Oakland, California) and is seen as a bellwether for what comes next. It is also marked by a widespread and vibrant resistance to a climate of “antipathy” and “corruption.” Some attribute its roots to fast-paced globalization and a global system dominated by capitalism. Implicit in capitalism is the notion that individuals per se are rational agents who are motivated by self-interest. The pursuit of self-interest and profit, according to this view, is moral to the extent that its consequences are good for the nation (e.g., job creation by the private sector) and society (e.g., healthy competition that is bound to benefit consumers). While there is always room for altruism, according to capitalism, it is important to bear in mind that individuals are seen as equally responsible for their lives as for achieving their goals and aspirations. A particularly relevant question that arises most forcefully concerns the role of government in such an economic system. Precisely, what is the role of government: (1) to preserve the status-quo oriented market fundamentals or (2) to redistribute wealth and resources through a fair and progressive tax system that targets super-rich and large financial firms, making available benefits through a social safety net to the poor and unemployed? Today, however, unbridled capitalism with its global reach has led to conflicts not only among nation-states but also within each society, posing a major threat to the social harmony and cohesion at both levels. The proponents of globalized capitalism—or a “new capitalism,” as it is sometimes called—are at pain in both the European Union—especially the 17-nation eurozone that is struggling with debt restructuring—and the rest of cash strapped Western world to explain that the good of society as a whole is guaranteed by an economic system that produces simultaneously tycoons and indigents. The world economic meltdown has revealed flaws of global capitalism and subjected it to a critical ethical scrutiny. Numerous economists, who had been and continue to be financed by corporations, and who have pushed for a new consensus on monetary affairs since the 1980s, have failed to predict the current global crisis. Most troubling is the simultaneous emergence of a crisis of “values,” “identity,” and “what life means” for a younger generation whose attitudes are driven more by fear than optimism. If all this is emblematic of conflicts of interests caused by market fundamentals, it is about time to reconfigure or fix the broken consensus on monetary and ethical aspects of global capitalism.