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Don't count on modern capitalism to last

December 6, 2011 | 10:58 am

Here’s what many of our readers say about socialism: A socialist approach to the economy can only last so long before the money eventually dries up. I’m paraphrasing, of course, but that’s the general theme as you scroll through our discussion boards. Question is: Will they soon start saying the same thing about Western capitalism?

In an Opinion piece for Al Jazeera, Kenneth Rogoff, professor of economics and public policy at Harvard University, asks whether modern capitalism is sustainable.

Continental European capitalism, which combines generous health and social benefits with reasonable working hours, long vacation periods, early retirement and relatively equal income distributions, would seem to have everything to recommend it -- except sustainability. China's Darwinian capitalism, with its fierce competition among export firms, a weak social safety net, and widespread government intervention, is widely touted as the inevitable heir to Western capitalism, if only because of China's huge size and consistent outsize growth rate. Yet China's economic system is continually evolving.

He says we’re failing to evolve: “Perhaps the real point is that, in the broad sweep of history, all current forms of capitalism are ultimately transitional. Modern-day capitalism has had an extraordinary run since the start of the Industrial Revolution two centuries ago, lifting billions of ordinary people out of abject poverty.”

Rather than dig our feet in the mud and remain paralyzed by financial crises, our economy needs to take into account global climate change, income inequality, the population bomb, and health problems. “It is ironic that modern capitalist societies engage in public campaigns to urge individuals to be more attentive to their health, while fostering an economic ecosystem that seduces many consumers into an extremely unhealthy diet,” he writes.

Refusing to react to these blinking lights, he writes, could result in capitalism’s demise. He warns: “Capitalism's future might not seem so secure in a few decades as it seems now.”


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--Alexandra Le Tellier

Photo credit: Karen Bleier / AFP / Getty Images

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