The capitalistic economy was a result of the medieval age when the Europeans suffered from the lack of markets, trade, production, and economic activities as well as the epidemic diseases like Black Death. The Europeans found the solution to the problems in the medieval age by producing more than the people needed in Europe and market it to the other people. Also, the commercial attacks to the Asian countries starting from the Ottoman Empire to India had given the opportunity of moving the valuable or tradable items to the European countries such as seasonings and precious medals. The invention of the train with a steam engine was another essential opportunity to carry the products over-countries. Consequently, the European economies have started using up all the natural resources and other resources including the human resources to produce more and more.
The main characteristic of the capitalistic system is to create profit under private ownership. All the resources are allocated to the use of the private companies or entities. These companies work hard to make the highest profit possible for them in the market. The competition between the companies guarantees a quality for the consumers, and it also enables the companies to find relatively better and cheaper ways of production and marketing. According to the capitalist theory, as far as the full competition exists in the markets, the economy works efficiently. The effectively working economies can create a perfect world for everybody. However, the real capitalistic story is not like the theoretical and ideal one above (Willie, 2016).
The global economy includes developed economies, emerging economies, and less developed economies. The story in and between the economies indicates us that there is no perfect world, and there is no efficiently working economies. While some countries were enjoying a high level of gross domestic product, the less developed countries could not produce any product to compete against the developed countries in the international markets. As a result of being underdeveloped, these countries could not produce enough or could not develop their production capacities. The people living in these underdeveloped countries are still suffering from poverty and other related problems (Rothman, 2012). However, is it possible to claim that all the people living in the developed countries are living comfortably? The answer is no.
Many residents in the developing countries or the less developed countries assume that the individuals in the developed countries are having a luxury life while not working much. However, this assumption might seem to be true for the rich people in the developed countries while it is not true for the middle class and the poor people in these countries (Rothman, 2012).
The poor population in the developed countries might have relatively better life standards comparing the poor population in the less developed countries. Their neighborhoods are relatively cleaner, and they might have cars though they are not high-quality ones. The poor people receive relatively more social support from the government. However, the puzzle of finding a way not to be poor exists for the poor population in the developed countries like the poor people in the less developed countries. For instance, the Black people and the Hispanics in the States are mainly consisting of the poor people. These communities have created their ghetto culture and their separate neighborhoods in the Southern states. The ghetto culture generates new poor generations, and the new generations have lost their belief in the social development through education. For a black person, getting a good education is less possible compared to a white person, and the studies indicate that when a black person is well-educated, the average wage paid to the educated black person is less than the amount paid a white person with the same qualities. Consequently, being poor in the developed countries is better than being poor in the less developed countries; however, the mechanism works in both kind of countries is the same. The ghetto culture creates high risks of living for these people.
The middle-class population in the developed countries have relatively higher life standards. They cannot have a villa house by the seaside; however, they can own a house inland. Their wage average is not more than 5,000 bucks a month. The capitalism promotes the feeling of being very wealthy for the middle-class people. For getting rich, many of these people spend tremendous effort and time, and even they forget or disconnect their families or their social environment. The social environment also pushes them to work harder and harder. Being uncompetitive in the capitalistic society is a big shame. The eager inside the middle-class people makes them spend more time to consume their energy. However, no person can work very hard in a short period and can generate himself. In simple words, the middle-class people consume themselves to get the relatively better position in the societies and the national economy. The hard working people gets older relatively faster, and they cannot have enough time to enjoy the time to spend what they earn. Also, they have to save most of their money because they need to buy some products and services those describe the increase in their social status. For instance, purchasing a large house is one of the biggest dreams a middle-class person has. Buying the house through getting a mortgage credit looks like a solution for him; however, paying 2,000 USD a month in 20 years is a significant burden on him.
Being rich is the way to have a comfortable life. However, only 10% of the whole community is considered as being a part of this class. Also, being rich does not guarantee full comfort. Protecting the wealth in hand is a tiring work to do. We observed that the big business have bankrupted in a few months during the most recent global financial crisis started in 2008.
Considering the situation of the poor, the middle-class, and the rich in the developed countries, it is easy to feel that the capitalist system is gestated to create new crises in the future. The American economy was based on high level of consumption, and it has failed in the last global financial crisis. The reason behind the global financial crisis was the consumption attitudes of the consumers in the American economy. The financial institutions, belonging to the rich people, have given away easy mortgage credits, while the middle-class people were ready to get these credits to purchase relatively more luxury houses to improve the increase in their social status. Consequently, the people have purchased the houses which were more that the affordable amount for the middle-class people, and the mortgage credit system, and correspondingly, the national financial system has collapsed (Tabb, 2012).
Consequently, the capitalistic system creates systemically crises every decade or every two decades. Each crisis is a result of capitalistic system pushing characteristics. Alternative approaches in the economy like Marxism studies why the capitalism fails regularly. The studies in the Marxist approach indicate that the capitalism does not have the characteristics suitable for the nature of the humankind, or the capitalism does not go well with the natural life. The capitalism develops destructive production, and this kind of production is not fully sustainable.
Works Cited
Rothman, J. (2012). Flush times and fever dreams. Athens: University of Georgia Press.
Tabb, W. (2012). The restructuring of capitalism in our time. New York: Columbia University Press.
Willie, J. (2016). The Crumbling Global Economy, and the Dollar Crisis. People Powered News. Retrieved 30 May 2016, from http://beforeitsnews.com/politics/2015/12/jim-willie-the-crumbling-global-economy-and-the-dollar-crisis-2764156.html.
