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This House Believes Capitalism Has Failed

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This week, the Cambridge Union will be welcoming members veteran and new for the first debate of full term. Chris Page, CUSU Welfare and Rights Officer, and James Mottram, CUCA Committee member, argue for and against the motion respectively.

Chris writes:

When we say that capitalism has failed, I don't just mean as an economic system; I'm talking about "capitalism" as a state of mind, a way of thinking and feeling and relating to your fellow humans. It's a system where opportunity is promised to all but only available to the few; which turns people into commodity, and makes us think about the measure of our lives in terms of the profit and the loss.

How else can we really explain the potential demise of the public education and health care systems, unless it is seen through a lens which shows humans relations to knowledge and health as not something to be valued in and of themselves, but reduced to cold cash payment only.

By what parameters has capitalism failed by? If we are to judge it by its own, it has, in some senses, never failed. Around us today, we only see its inevitable consequences, the entirely predictable end product of system based around greed and exploitation.

Ha-Joon Chang - by far one of the most interesting economists of our day - suggests that since the end of WWII, implicit social contracts have been held between a state and its people: "In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives - childcare, education, health, unemployment, disability and old age."

He goes onto suggest that cuts - motivated by organisations like the IMF in a mad attempt to keep capitalism afloat - are rewriting social contracts by the back door, forcing people onto the streets to guard their livelihoods. Chang emphasises that economic change forces a political change which, he argues, threatens the make up of a democratic state.

Chang's writing is food for thought, and I would agree that austerity is anti-democratic. But I would take things further; Chang, like many, leaves open the possibility of a "responsible capitalism" of the type Ed Milliband seems so obsessed with. How can such a system be possible? It makes about as much senses as a "more equal ableism" or a "less sexist misogny".

The problem maybe less immediate, less obvious - in the case of the globalised economy, the wage slaves are just shuffled off to sweatshops in other countries - and it becomes the similar to the way in which our society responds to sexism. It is not "misogyny" to sexually objectify a woman; it is "banter". It is not hateful towards women to encourage them to expose themselves and hold their sexuality up to a male gaze for approval and dismissal; it is popular culture.

Obviously, the issue of women's rights and female emancipation cannot be directly held equivalent to capitalism, but the same principle of internalisation will apply on under "responsible capitalism." We can pat ourselves on the back, congratulate us on our humanity, before going back to the same cycle of exploitation and misery, which has simply become the norm. Capitalism has not failed itself; it has failed us - to that end, it should be done away with.

James writes:

To be as blunt as possible, capitalism has not failed; it is ridiculous to suggest it has. Is the economy today, here in Britain or around the world, doing exactly what we wish it might? Of course not. Can everyone find the job they would like, or afford to buy all the things they want and need? Of course not. But the fact we are living in difficult times does not demonstrate a failure of capitalism.

What we are seeing is what we see, in one form or another, to some extent or other, at all times and during all economic conditions: the imperfection of capitalism. It is an imperfect system because people are imperfect creatures, and we inhabit and imperfect world. Imperfection, however, is not synonymous with failure.

At the heart of capitalism lies the right to private property, and the assumption that private property and private profit form the basis of the economy. The same people who routinely refer to the Financial Crisis of 2007-08, and the resultant recession, as a 'Failure of Capitalism' are usually those who will lament that Britain is not more like Germany, Denmark, or Sweden. Yet these countries are all capitalist, and private ownership forms the basis of their economies.

The fast growing economic powers such as China, India, and Brazil have achieved their recent successes thanks to the increasing role which private ownership and free markets have begun to play in those countries. The recent 'failure' of a few capitalist economies is hardly reflective of the inherent ability of the capitalist system.

The extent of that failure is also questionable. In Britain over the last two years, despite the
relentless criticism of the state of the economy, the private sector added 1.2 million jobs. If
capitalism, despite the Eurocrisis, sluggish global markets, and ongoing austerity, is still capable of putting more than a million extra people into employment, it hardly sounds like a 'failed' system.

Did some private businesses help to cause the recession we are now all struggling with? Absolutely, but this does constitute a failure of capitalism. What the world witnessed four years ago, and in the years leading up to that point, were repeated failures of regulation and of fiscal and monetary policy, in Britain and around the globe; not a failure of private ownership, but a failure by those in government who were trusted to regulate our economic system. If a driver decides to steer their car toward a cliff, you would hardly blame the car for the inevitable outcome.

Capitalism is not perfect, and it is because of those imperfections that we need regulation, safety nets, and government in general. But this presumes those tasked with regulating know what they are doing; just because there is no real alternative to capitalism, does not mean there are no innovations to be made in oversight. Good governance can influence whether capitalism works a bit better, or a bit worse, but it cannot chance the fact that it works.

If you are a member of the Cambridge Union, and would like to contribute to this blog, please e-mail Sophie on press@cus.org for more information.