Published On:17 November 2011
Posted by Indian Muslim Observer

GUEST EDITORIAL: Occupy Wall Street Crisis could be a sign of capitalism failure

By Shafeeq Rahman

Recent protest against the capitalist policies has spread to all Western countries after get inspired by American’s slogan "Occupy Wall Street" and Spain's "Indignant". Scores of protestors from USA, UK, Italy, France and other 82 countries from different continents turned out in the financial capitals across the world to show their frustration against the exploiting concepts of capitalism and anger among the people continues to mount with the growing influence of banking and corporate lobbyists in the government monetary policies which caused to increase the social and economic inequality, unemployment and corporate greed. Key concept of capitalism ‘laissez-faire‘ to keep the market without any government intervention provide the chances for some wealthiest person in society to grab all the country resources. The main motive behind all economic activities under capitalism is also to maximize the profit without bothering its implications. Instead of producing the basic necessity goods to fulfill the needs of the common masses, the producers confine their production only to meet out the luxury demands of this elite group because they have greater purchasing power capacity in comparison to large section of societies who are poor with lesser capacity. The government is duly obliged under the influence of money power to change its economic policies in favor of the interests of handful of persons. In 2009, the BBC World Service global poll about the capitalism performance revealed that “dissatisfaction with free market capitalism is widespread, with an average of only 11% across 27 countries saying that it works well and that greater regulation is not a good idea. The most common view is that free market capitalism has problems that can be addressed through regulation and reform — a view held by an average of 51% of more than 29,000 people polled by GlobeScan/PIPA”. Occupy Wall Street protest of USA may also be linked with the lack of social benefit expenditure and increasing government trend to spend in the war against terrorism in other countries like Afghanistan and Iraq, as well as a war with drugs mafia. Total military expenditure of USA is US$661.049 billion for the year 2009, which constitutes 4.71% of total country GDP and 17.82% of central government expenditure.

USA and other developed countries are among the top nations in terms of national income and per capita income, but a large section of society is even not in position to fulfill their basic needs. The concept of percolation that poor will be benefitted from the economic growth in gradual time period is proved wrong in these countries. USA is well performing country in terms of national income growth, but the number of poor is increasing year after year. As per the release of USA census on 13th September 2011, the official poverty rate in 2010 climbed to 15.1%, up from 14.3% in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in the poverty range in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years of poverty estimation history. The gap between the distributions of income (Gini index) is higher in almost all capitalist economies i.e. United States, South Africa and Brazil from the less capitalist or social welfare states i.e. India, China and Russia. The growth in income of a country or region will not enhance the prosperity of its nationals unless it is inclusive to all citizens by reducing the poverty, improving the equality or generating the employment. Wage determination as per the labor demand and supply in the labor market is another illusionary concept which is also proved false by large scale of unemployment in capitalist countries, while the level of income and production is on higher side there. In the case of United States, employment position has worsened despite the increase in national income in the last 20 years.

Without government intervention, it is almost difficult to curb the unemployment, inflation, inequalities of income and wealth and overall targets of inclusive growth and development. There should be a regulatory mechanism to monitor the market malfunctions, which ensure the development to the entire citizen and to fulfill the basic necessities of life. It is pertinent to know that anti capitalist protest does not mean as pro to socialist approach, people looking towards a new economic era which consider their interest without imposing the Marxist style restriction on people’s freedom to choose the occupation and to own the private property. Manmade economic system never becomes a replacement of divine Islamic economic system. Socialism and capitalism from the outset were not a complete solution of man’s economic problem. These could, however, resolve the partial part of problem, but their harms are greater than the benefit. At the time of bipolar world divided between socialism in Russia and capitalism in USA, Maulana Moududi predicted on 30th December 1946 saying that “The time will come when Communism will be under stress for its survival in Moscow itself and capitalistic democracy will be in a desperate plight to defend itself in Washington and New York even.” Iran’s supreme leader, Ayatollah Ali Khamenei, also said that the Occupy Wall Street protests taking place in New York City and around the country will end up toppling capitalism in America.

Islam’s economic moderate system based on the divine principles of free market and liberty with due supervision of government bodies to accomplish the objective of mankind welfare, could be a real alternative of socialism and capitalism. Islam advocates a system of equitable distribution of income and wealth with justice in the resources of nation and ensures a minimum standard of living to all so that the basic needs of entire community could be fulfilled. Besides the private and public sector, Islam also has the provision of voluntary sector to take care of deprived section of society. In place of repressive interest based monetary and banking system, Islam encourage an environment where the people get interest free loans (Qarde Hasna) for their basic and emergency requirement and can start their venture as a partner of trade under the profit and loss sharing in Musharakha and Mudarabha modules. Profit maximization and prosperity in the materialistic life are not the only goals of all economic activities but Islam inform about the welfare of whole mankind and success of life Hereafter as main motivational factors for economic activities. These are not the philosophical thoughts, but were implemented successfully in the time of prophet and his righteous four Khalifa period. Occupy Wall Street protest give the Muslim Ummah a chance to present the characteristics and benefits of Islamic economic system in front of the World so that not even Muslim but the whole World realized the peace and kindness of Islamic system.

[Shafeeq Rahman is a professional researcher on India-centric socio-economic and political databases. He can be contacted at rahman.shafeeq@gmail.com]

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Posted by Indian Muslim Observer on November 17, 2011. Filed under , , , , , . You can follow any responses to this entry through the RSS 2.0. Feel free to leave a response

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