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Rhyno
 
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Capitalism needs to be balanced again

09 March 2012, 10:16

Over the past decades, the world has witnessed the triumph of capitalism over communism with the fall of the Iron Curtain.

Everyone, even the Russians agreed that this was not the way the world could be governed, or people could live for that matter. What very few people realised was that capitalism was in its liberation phase, and not the hyped up extreme it is nowadays, whereas communism was, and still is, the extreme form of socialism.

The point I’m making is that no system, be it left or right, will ever be sustainable in its extreme form. Monopoly is but one of the extreme forms of capitalism, and the dangers thereof is evident in the increased activity by the Competition Commission during the past years.

Basically it boils down to any system reaching such a state that control is asserted unilateral...and centralised.

In communism, you had the influence on a political level alone, whereas capitalism relies on supply and demand economics, politics, fiscal policy, and so forth.

Some of the most successful European countries utilise a healthy mix of socialism and capitalism, where the balance is struck with just the right amount of political influence. True, this normally extends to socio-economic issues, always associated with budgeting, but in doing so, the regulatation of money which would normally be in the hands of medical schemes or retirement annuity fund managers, are far better protected against the economic abyss.

In times like these, conservatism is king when its your own money and quite the opposite when its not.

As most people know, the most prominent reason for the collapse of the financial markets in 2008 was due to de-regulation of the financial sector in the US, and by implication internationally. This first happened in the United States, and due to the products developed and underwritten by, mostly American based banks, the rest of the wealthy world soon followed.

In a nutshell, by leaving capitalism to its ideological self, it became an uncontrolled, unregulated mess, which, due to its successful triumph over communism, has lead most of the developed world into an abyss!

Don’t get me wrong, I am and always will be a capitalist, however, I also am a realist, and realistically, its time for politics to step-up.

A balance needs to be struck between socialism, capitalism, and stronger fiscal policy by governments. Obviously the leads to regulation of markets, which in its purest ideological sense, is counter capitalistic. In my opinion, Barack Obama has started the road towards this infamous “balance” I’m referring to by firstly attempting to rectify the previous deficit with a typical U.S Democrat view of taxing the rich.

Obviously, this places a burden on economic development when you create a “ceiling” for the rich, where the tax becomes unbearable at some stage, and everyone just loses interest in re-investing. However, Warren Buffet is an advocate for this approach, and we all know he’s no communist...

The big picture comes down to this: capitalism needs to adapt, and quickly. The Chinese have shown that communism in integration with the rest of the world has worked in a macro-economic sense. True, I sincerely don’t believe the ground floor, minimum wage Chinese worker views it as such, which is the MAJOR downside to communism anyway. The point is, they learnt from the mistakes the USSR made, and adapted. Now they'll overtake the U.S Economy by 2020!

Capitalism was, and is being outplayed, and it vests with the U.S Presidency, and Parliamant to wake up!

The problem is that Obama’s view is based in logic, whereas the Republican response is based on archaic ideological views, which haven’t changed in hundreds of years!

Kind of sounds like the South African parliament...only, the tables are turned... but then again, were things ever any different when it concerns logic and politicians?

It doesn’t matter what your opinion of the United States is, if they go down, we all sink together, and Europe is definitely not hasting to help, even if they wanted to, they have their own third world debt to save in Greece and Italy...

Balance...balance is the key to any sustainable success, and the world lost that a very long time ago!

However, its time to find it again, for if we fail...balance will force itself upon the world anyway...as it has already started to happen in 2008, and we all know how that ended...it didn't.

I think the question is based on our willingness to face the tough challenges ourselves, or do it the hard way...again!

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