Two paper monsters: capitalism & socialism


Max Streicher-floating-giants-1.jpg (Canada)

 In a world of uncertainty, traditional principles that define the concept of economic & political models are in constant threat and should be revised. Beaten by poverty and particularly challenged by an increasing inequality, we live in a world that is sending lapidary signs of the need to search for a correct economic-financial balance beyond political ideologies.  To achieve that goal we need to deprive ourselves of all kind of political prejudice and see results only by their impact over the population. Eradicate poverty and balance the inequality is -or should be- the main goal in any financial-economic agenda beyond any political model of decision-making.

At the end, capitalism and socialism are a matter of political ideologies that could influence economy but not necessarily determines its goals. In fact, the success of a socialist economy like China is in part for their capacity of combining a liberal economy model within an authoritarian political system.

The traditional concepts of left-wing and right-wing ideologies is progressing to the point that there are not antagonistic as in the past, in which one-size-fits-all on economic, financial and political affairs. Currently we are experiencing the transformation in hybrid models that moves according to economic development criteria and political factors.

By the contrary of positions that are seeing the combination communism-capitalism as a contradiction[1], we welcome with pleasure the capacity of applying different models in a smart and harmonic combination that leads to tangible successful results: China has reduced poverty level by 71% in three decades, from 84% to 13%, meanwhile US has 15% of its population living in poverty. The GDP annual growth rate of China is of 6.9%, and of US is 2%.

We are witnessing the evolution of traditional ideologies and a stronger & better integration in a global world. Those economic models that prosper based on a hidden political agenda are not only unsuccessful but also unfair. Examples that show the failure and at the same time the need to reestablish new codes are found on the impact of global financial crisis in developed countries or the adoption of liberal economic models by socialist governments.

After global financial crisis, an exercise of critical thinking forces us to place economic-financial standards in a different position than political codes. Reduction of poverty, inequality, unemployment and in general defense of the well-being of the population supposes apply models that go beyond political ideologies and perform in a global world. Applying the correct economic model should be the goal and not the “correct” development of a political model.

Even if China is a socialist country it has focused its economic affairs under the acceptation of a global model. A smart strategy that has guided them to a leading position on partnerships, development aid and international agreements that make them literally be inserted in a global world without follow its rules at national level. This apparent contradiction is a skillful combination that make them being aside from the negative impacts of global financial crisis, in fact getting benefits from this situation by strengthen its international roots on development strategies. This hybrid model has been designed in a way that its national economy sees the benefits of interacting with the rest of the world but without loosing their own “print”. At country level applying extreme regulation policies and at international level rules of open market and global vision are the focuses.

Is time to separate political national ideology from economic models and accept that both could coexist in a pacifically and harmonic way in financial-economic terms.

Current parameters of measuring economic growth have moved from traditional perspectives and goes beyond. That is the reason why a socialist government could apply liberal economic measures and develop an international strategy within a global economic model. Nowadays the path for growing is fully linked to a global economy making  any attempt to hold a national preeminence a real utopia.

Paradoxically an economic model is not necessary a political matter even if historically has been together and may be difficult to see it separately in practical and ideological terms. Political ideologies should be measured for their results; poverty, inequality, unemployment are all matters that could be resolved by a balanced economic-financial focus but without political interferences. The leading global role of China is being key to achieve an economic balance through a political attitude that focus on a flexible and open financial market. Definitely this economic behavior gives hope for a global change that goes beyond political ideologies.

Indeed this hope for a global change on economic models relies on the balance that new epicenters of power could bring. BRICS is one of that initiatives who mistakenly has being seen as an “anti American initiative”, however is it just “another initiative”, additional and complementary to the US-EU-Japan power axis. Its origin does not rely on competitiveness but on the need for changes that global financial crisis has exposed.

In the past the union among developed countries has always been considered a guarantee of wealth and global development however, financial global crisis has shown the weakness and ineffectiveness of the system. As a direct consequence it arises the urgent need to involve emerging economies at the same level of commitment to help rebalance the world economy. This is one of the secrets for a global successful model: the horizontal integration of all economies and the end of the historically vertical financial relationship that disempowers countries by loosing part of their sovereignty in an unhealthy manner. Be part of a global model really means loose sovereignty but on a balance relationship of mutual benefits without preeminence of one country over another. South-South and triangular cooperation are examples of the possibility and real opportunity of being owners of the process.

Capitalism & socialism are both “paper” models that have grown on side and importance but without strong roots that could sustain them in the long-term; the economic slowdown of both representatives countries (US and China) shows how easy it can be to blow them up if the political, economic and financial sides do not hold a counterbalance among them.


*Picture: “Floating giants”. Max Streicher


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