Final destination of capitalism

Just finish read a book, discussing about the current situation of capitalism, which is a bit off of track from what the founder, Adam Smith wish to be. Just like every great philosopher, like Jesus, Muhammad, 孔子 and other, people tend to change their thought, to fit the situation, the situation which will benefit them. The successor misinterpret their point, intentionally, or unintentionally, to create a situation, which benefit them the most. And these misinterpretation, resulting various wars, human disaster.

Human civilization is proud with capitalism, one of the ideology which last for almost 3 century, and it is proved to be the most success, which lead civilization toward the prosperity time ever. The power of "the invisible hand", lead people react toward the most productive economic behavior, which bring specialism, the formation of metamorphosis and others.

But since a decade ago, when all the world leader gather in WTO summit, there are more and more people protest outside the building, claiming the capitalism, globalization, had bring so much pain toward them. Why did this happen, don't they remember that, is capitalism, which bring them all these prosperity?

Nope, this is not the prosperity we wish to see. Just like Kenichi Ohmae 大前研一 said, our society are moving toward M-shape society, which there are a lot of people who very rich, and a lot of people who very poor. Current middle class will move toward down side. Why does all this happen? Can't capitalism ensure everyone have a happy ever after life? Where is "the invisible hand"? It should correct the situation, toward balance.

Please always remember that, theory is always base on assumption, every theory is. Adam assume that this "invisible hand" work, base on an assumption, moral. Adam expect "the invisible hand" work fine, when people will not misuse it, to hurt anybody else. And if, when people do so, the government should come in, and correct the situation.

But now, the system reward short term profit boost, which will bring the stock price up. Every management are given some stock options, which they can only benefit with stock price surge. For example, when competition come, company have 2 choice to counter it, inprove the quality, or lower cost. Of course the ideal of capitalism is "the invisible hand" will force the company to improve the quality, which will benefit the whole society. But what management will do now is, reduce the employee cost, or even lay-off them, and use 5 people to do 10 people's work. The effect is significant, the stock price surge, management get lot of money, so do shareholder. But the product's quality is not improve, and a lot of people are suffering with job losses and low salary.

Ya, GDP grew, stock market up. It show prosperity, but most people are not enjoying it. Only those who rich, will become richer, and the poor, will only had their fate to be squeezed. People already turn this capitalism, as their own carnival, enjoying the data which only look at the profit, and sacrifice others. Money is all the thing, we are living in such generation. And finally, these bring us th greed, which generate 2008 subprime crisis. "The invisible hand" become crazy, which drive people to greed, to hurt other people in order to sustain growth.

Where will capitalism go? It already had several update version, from 1987-1997 privatism, 1997-2007 golablization, and now? No people will know. Perhaps more socialism's capitalism. We shall see.