Why Capitalism has not won even 25 years after Cold War?

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It has been 25 years since the largest enemy of capitalism fell, yet Capitalism is practiced in three World countries but consider to be difficult to politically project, why? The Communist Party of India searched the World for foreign investment when in power in one of India hugely populated States, West Bengal! What makes Capitalism so untouchable in India where Churchill proverb “socialism is redistributing poverty” looks more true than ever. In countries like India, Brazil, Indonesia, why are most Capitalist reforms considered politically difficult pass. Anyone would look at developing countries and think it has more to benefit from Capitalism. Even then, why are these countries finding it tough politically but as only economic solution.

The biggest reason and surviving obstacle in the way of Capitalism is poverty. A well-off family would want more opportunities, more choices in markets, better future for the next generation, all of which Capitalism provides. But a person in poverty, without proper or useful education is likely to ask for much more help from the government. Unlike Reagan’s “Government is not the solution but a part of the problem” he looks at it as last respite to survival. In Third World countries which were in centre of Cold War, it proved a challenge unsurmountable for politicians to explain to their citizens; the benefit of Capitalism. This also verifies why most countries which benefited from Capitalism to move from developing to developed are Autocratics like South Korea, Taiwan and other East Asian countries. Only way Capitalism has succeeded in these countries is that Social crashes economically forcing the elite, media and politicians to accept Capitalism e.g. India in 1991, China in 1978 etc.

But in negatives, we must not forget that it is now universally accepted that government has no business doing business. This is also accepted in almost all developing countries. But not all is rosy here too as many governments now do not do any business but to “protect the interests of downtrodden”, they continue one or more public companies in otherwise private sectors or provide price caps or subsidies or overregulate sectors. This has led to less free, distorted Capitalism with little investment and more than required opening up of business sometimes leading to resentment in even the middle-class.

Heavy subsidies to politically unified or over-represented groups is very common, overspending is a global practice, over-regulation in developing countries to “prevent MNCs from making undue profits instead of common man benefiting”, but what is clear is this is clearly against Capitalism. Overspending kicks out private sector lending, and subsidies are political stunts and vote collectors. Over-regulation makes ease of doing business tougher while kicking out both domestic and foreign investments. But this criticism of overspending or subsidies or over-regulation is difficult to hold in front of person in poverty who think that this is there only respite. For example, a person in India who is in poverty would support Food Security Act and will not be convinced by our argument.

This is not to say Capitalism will reduce or die out but it only increase but that we need to eliminate poverty which will provide a much faster and easier path to Capitalism than more “traditional” economic crash method.

We also need to understand that poverty, and not socialism,  is the BIGGEST enemy of capitalism.

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