Saving Capitalism from Itself

Free market capitalism needs an urgent realignment if it stands any hope of tackling the world’s serious and growing economic problems.

By Osama Al-Sharif

Last month’s centenary of the Bolshevik Revolution came at a time when the future of capitalism—its ideological anti-thesis—is once again being heatedly debated by economists, historians, and philosophers alike. No doubt it is a solemn occasion, for the Soviet Union with its communist dogma—its most ominous by-product—has left a turbulent legacy; one that evokes sour memories of totalitarianism, bloodshed, gulags, displacements, the Iron Curtain, and bitter disappointments by its proponents. 

But if the end of the First World War in 1918 brought de facto closure to the nineteenth century and by extension the collapse of great European empires, the Russian Revolution heralded the true beginning of the Twentieth Century. Much of that century’s geopolitical events were shaped by the struggle between the Soviet Union and its enemies, first Hitler and then the West—a struggle that began in Eastern Europe and then spread quickly to Southeast Asia before erupting in other parts of the globe, such as Africa, Central and South America, and the Middle East.

When the Soviet Union suddenly collapsed in 1991, historians were quick to pronounce that the Twentieth Century was the shortest of all. It was the “end of history” and the beginning of a new world order where neo-liberalism triumphed as the new face of capitalism and globalization. Much of these doctrines and pronouncements had changed or disappeared in the wake of 9/11, the rise of anti-Western Islamist jihadism, the global financial meltdown of 2007-8, and the shock and awe of the so-called Arab Spring. 

Neo-liberalism as an ironclad and inevitable outcome is now being contested through the rise of populism and ultra-nationalism, on the one hand, and the resurrection of left-leaning politicians and parties, on the other. Neo-liberalism as an economic doctrine was tested by countries in the region, Jordan being one of them albeit it focused primarily on privatization while failing to shrink the government or restructure the public sector. Thus the classic laissez-faire economic liberalism was never truly embraced resulting, among other factors, in a bulging foreign debt, modest growth, endemic budget deficits, and rising rates of unemployment and poverty. The reality is a hybrid system that is out of control. 

While popular in the 1980s, today neo-liberalism is being discredited by experts. At the heart of the ongoing debate is the failure by many liberal democracies to tackle the important issue of social and economic justice. Donald Trump’s historic election last year can be summed up as a desperate rejection of globalization and the new economic realities brought about by the overwhelming wave of technological advancements. Those who voted for him are trying to cling hopelessly to the bygone days of the carbon era; the age of fossil fuels and heavy industries where the United States was once dominant.

The concentration of wealth among the very few, who are also able to influence the outcome of the political process, is contrasted by the gaping schism that separates the rich from the poor. By the same token the once thriving welfare states of Europe that were influenced by the Marxist-Leninist social doctrines, especially following the Second World War, are almost all in trouble. No one knows how long countries like France and Britain could maintain their national health services and social security systems when their economies are under siege.

The Bolshevik Revolution had failed to turn the Marxist-Leninist utopia into a reality. It was eventually defeated by its capitalist nemesis. But the latter is also in trouble today. Neo-liberalism nearly brought down the entire global financial structure and social and economic injustice continues to haunt developed and developing countries alike. Globalization may be irreversible and inevitable in today’s inter-connected world, but it has its shortcomings and one could dare say that it is a force without a soul. 

So where do we go from here, a century after the Russian Revolution shook the world and turned it on its head? The U.S. has been catapulted into a trajectory that does not promise to deliver meaningful answers in the short-term. Europe is undergoing a painful, socio-economic contortion, the outcome of which will likely have major consequences for migration to the continent. The answer could very well come from the East; from China, South Korea, Malaysia, Taiwan, and Japan and progressive Arab countries will do well to look towards these countries as they feel the pangs of a voracious capitalist system that has gone amok. 

For Jordan, a country facing huge economic challenges, a thorough review of the policies of the past decade or more is needed if we are to fulfill the now strategic objective of self-reliance.