Capitalism in Crisis

Capitalism in Crisis


Economic System of Capitalism
Have you ever wonder why is it so difficult to get richer? Is it that rich people are smarter than us? Or is it that they're working harder than we once did? Both my parents working for life in 'kedai runcit'. My dad, who is now 60's plus, still waking up at 6 a.m. every single morning to open the shop, and back home at 8 p.m for seven days in a week. Why are my parents working so freaking hard yet so difficult to survive? Why? 


The contemporary economic system of capitalism promote private property, freedom of exchange, competitive market and limited government intervention. However, this economic system have transformed the 'welfare-state' capitalism into the so called 'predatory capitalism' or 'neo-liberal capitalism' which the dirty secret behind it, extremely focus on 'maximum profit' by any means.
The rich get richer and the poor get poorer
This motto which truly express the current society of inequality where the owner of capital accumulate wealth more quickly than those who provide labour. Only the capitalist who manage to control the market able to enjoy the prosperity at the end of the days. That's how inequality the current society is. According to Oxfam (an international confederation focusing on the alleviation of global poverty), in 2019, the world's 2,153 billionaires were richer than 4.6 billion people living on planet, where the richest 1% are twice as wealthy that 90% of the human population, and where one individual alone is worth some $130 billion. 

In the past, there's certain policies react to the capitalism that have been done, for example raise taxes on the rich, regulate powerful corporation or raise workers' wages. However, the neo-liberal economists would warn all of these policies would be a terrible mistake. Raising taxes always kills economic growth; and any form of government regulation is inefficient; and raising wages always kills jobs. In some ways, it could be said that 'Capitalism is buying the law'. 

Capitalism against Housing Development
'Under capitalism, housing provision is based on what will make developers, lenders, and landlords rich — not what average people need to survive. That’s why we’ll never get decent, affordable housing for everyone under the free market.' - Robbie Nelson, Jacobin e-magazine
Private property rights are central to capitalist economy, its execution, and its legal defense. Which means that under capitalism, the free exchange policy allows one's property to be trade freely without controlled. And today, you complain the too-damn-high rental or house price. The profit motive of capitalism will never meet our needs for high-quality, affordable housing.In other words, capitalists don’t run their business based on the quality nor quantity of their product, but based on their very own profit. 


Facing such challenging housing crisis, one of the effective approaches is the provisions of social housing (Projek Perumahan Rakyat, PPR & Perumahan Awam, PA) by our government aims to benefit the lower income groups and create a harmonious society, while promoting a sustainable living environment. I think the social housing is a very good fundamental approach for socialist reform. Besides, during the recent press by KPKT, our minister Zuraida Kamaruddin said one of the effective ways is the Rent-to-Own (RTO) scheme which offers buyers the option to rent their home for five years and apply for end-financing to purchase it in the sixth year. Houses under KPKT’s Rent-to-Own scheme can only be resold to the ministry to prevent speculation, said Zuraida. Furthermore, the Built-to-rent scheme also one good approach to control the property belongings as well as provide a temporary affordable housing for the poor.

In fact, I would concluded the neo-liberal economic theory is dangerously wrong which lead to the growing crisis of rising inequality and growing political instability. Besides controlling the current crisis, what would be the best solution to resolve the future's economic. Should we stop the Capitalism model? Should we adopt a new theory of economy? If yes, what would it be?



Reference:
Robbie Nelson, Jacobon E-magazine (Nov 21, 2018) Capitalism Can’t Give Us Affordable Housing. Retrieved from: https://jacobinmag.com/2018/11/capitalism-affordable-housing-rent-commodities-profit