Are you an 80s or a 90s kid? Don’t you see how life has changed so much over the last few decades? Sure, you’ve grown along the way, but I’m not talking about responsibilities and personal growth. Or am I?
Before you start thinking that I might be a delusional little internet troll, let me tell you what I’ll be writing about in the following lines: Capitalism. Yeah, you’ve heard of it somewhere. Perhaps it was your NRI business tycoon of an uncle, or it was some economist showboating his/her vocabulary on a news debate, or maybe you’ve heard it in your humble little classrooms in the economics class in class ninth! But, do you know what the word really means?
I’ll describe the word in three ways so that I don’t disappoint anyone.
To the dictionary lovers, going by the words of the Macmillan Dictionary of Modern Economics, Capitalism is defined as, “Political, social, and economic system in which property, including capital assets, is owned and controlled for the most part by private persons. Capitalism contrasts with an earlier economic system, feudalism, in that it is characterized by the purchase of labor for money wages as opposed to the direct labor obtained through custom, duty or command in feudalism… Under capitalism, the price mechanism is used as a signaling system which allocates resources between uses. The extent to which the price mechanism is used, the degree of competitiveness in markets, and the level of government intervention distinguish exact forms of capitalism.”
To the scholarly article hoarder, a Harvard business school publication says, “Capitalism is a social, political, and economic system that succeeded feudalism based upon recognition of the rights of private parties to choose how to employ their labor and capital in markets as indicated by market prices instead of tradition.”
And, to the simpletons or the laymen like myself: capitalism is simply a culture wherein people or a bunch of people take it upon themselves to improve not just their lives, but improving the lives of others as well—without seeking the help of an authority like a government. In the pursuit, people can make money, and that is one of the many benefits of such a culture. The government takes a back seat.
We all love some comparison, don’t we? Though we may despise it as much as we hate Sharma Ji’s beta, it is a part of human nature. I’d like to make a little comparison here—just for the sake of taking this article forward and enlighten the reader better.
Well, what’s a graph doing here? A graph of China’s GDP per capita. What on earth does that mean? What? Are you mocking me for my poor understanding of Economics?!
GDP per capita is a reliable scale of how well a country’s citizens are doing. It shows just how wealthy a country’s citizens are too. Now that that’s out of the way, back to what I was getting to. For China, you’ll see, the stats are moving upward, and that shouldn’t be a bad thing, right? It is true. You’ll also see that around the 1990s, something interesting happened. China was at the stage of major reform. It was around this time that China began making strides towards becoming the world’s factory. The government decided that private manufacturers could now manufacture on a massive scale with little or no restrictions. This liberal move by the Chinese government changed the trajectory of China’s economy. Everything has been upward and onward ever since. Yeah, this reminds me of those poor “Made in China” jokes again.
Liberalisation?
You might recall that something similar happened with India in the 90s right? Those retro visuals of Dr Narasimha Rao and this not so familiar ex-Finance Minister Dr Manmohan Singh might be flashing in your heads. Doordarshan and pathetic cable TV: hard to say that that was a thing once. Liberalisation, Privatisation, and Globalisation changed the way Indians looked at the economy forever. The growth has been remarkable.
Over the course of these years, massive changes have taken place. Cultural shifts, imported products that were once smuggled are now legal; iPhones are now being manufactured locally! Who would have thought!? My word. India certainly has come a long way. What was behind all of this? There’s only one answer. The spirit of capitalism: equal opportunity; free markets; reduced government restrictions; better standards of living; sustained growth. A country’s prosperity.
It is not a joke when people say that India has a long way to go. India has massive potential—potential that is out of this world. I’m reminded of this little analogy that I made up about India: ” India is like that bright but slack and mischievous little kid who has all the potential to be the best student in the class, but gains attention for all the wrong reasons.” True, isn’t it? People outside, in the west and in the far east all joke that India needs to get rid of its stupid politicians, its slums, its hunger problems and a whole lot of problems that it needs to address. But, in spite of all this uncertainty and the criticism, India has done so well in so many ways. This is a great reason to be a proud citizen! What gives me even more delight is that the only way is up, and capitalism is going to play a huge part.