Thursday, January 05, 2006


Every time I come home to Bombay from Atlanta, I am faced with the difficult problem of buying something for as many people as I can. Exploring the stores and malls in and around Atlanta, I am struck by the amazing variety of things at offer. Some are necessities of life, while others are simply silly, like designer clothes for dogs. However, the sheer abundance of things to buy makes entering an American shopping mall a fascinating experience.

Since the newspapers in the US are extremely expensive, and impossible for a college student to afford, my only source of news is the internet. With this regard, I find Google News a wonderful tool. So, anyways, I noticed that every Christmas season, all the companies and newspapers go haywire trying to determine what kind of sales have occurred the week before, after, and during Christmas. In fact, the period from Thanksgiving to Christmas, people go crazy buying gifts for their spouses, kids, friends, and coworkers. It is a shopping frenzy with alarming importance to retailers of all sizes and shapes. In fact, until a few years ago, many retailers depended on the profits made on the day after thanksgiving, (Black Friday, as it is nicknamed, the black referring to bottom-lines) to see them through the rest of the year. So every year around this time, you will see the United States President make a speech about how the economy is doing fine and everything is perfect with the US and that citizens should help the economy by buying.

Buying seems to be the number one duty of every American citizen. The American economy depends on consumption. And the world economy depends on America. So it is in everyone's interests for people to consume. That is how capitalism works. Another strong driver of the capitalist system in its current form are the share markets. In these, investors provide companies with money, in return for a stake in the company, and hope that the company grows to a greater size, thus making the investor's stake more valuable than what he paid up. Thus publicly listed companies (pretty much every big company) are under tremendous pressure to become bigger with every passing year, month and day. This growth is achieved in a few ways, increasing the products the company deals in, expanding the market the company trades in, and entering new markets. All of these actions lead to greater consumption than before, helping companies grow, and keeping shareholders happy.

Thus it is quite clear that capitalism depends on consumption. When you mix in the share markets, economies not only depend on consumption, but increasing consumption. Yet, the resources that are converted into things to consume are finite. Already, we have reached a situation where certain groups of people consume far more than what the average human should be using in order for the earth to sustain our species. The only reason that nature has not completely collapsed yet is that vast majorities of the people on earth live in sub standard conditions. In fact, if there is one defining characteristic in capitalism, as it exists today, it is inequality.

One aim of our society is to help uplift the poor and make sure that they have similar lifestyles as a middle class individual. However, if such a situation happened, there would be much trouble because the planet cannot sustain 6 billion people living such a lifestyle. Economically also, it has been determined that approximately 6% of the work force needs to be unemployed for a capitalist society to function effectively. Therefore, capitalism needs inequality to function. While personally I believe that capitalism is indeed the best system we have at our disposal, there is no reason that it cannot be improved. For improvement, it is necessary to recognize its flaws and mistakes rather than to unthinkingly brand everyone who disagrees with some of its philosophies as a commie and a traitor.

1 comment:

chitra said...

very perceptive.