The End of Capitalism?

Given the title of this post, you're probably thinking, "Oh God! Now he's gone communist! All that Russian history has gone to his head!" Well, before you start lunge for your phone or email client to set me straight on the devilry of the communist system, let me eliminate your fears. This post has nothing directly to do with communism vs. capitalism and that lousy debate that's been overdone beyond imagining. It may have implications, but you know that in the world of words implications are, of course, inconsequential. So here is my brief exposition, direct from mi cabeza.

Let's consider the case of our current capitalist socio-economic system. I've thought about this, and I'm not sure if I'm right. But it seems to me that this system relies very much on an increase in output to survive. If you don't increase output, then there is no return on capital, and you don't have capitalism. So how do you increase output? You can increase input, and you can increase productivity. This brings me to my first point. On earth, there are finite resources. In the past humans societies have rarely reached the point where resources are a debilitating factor in their development. This is because past human societies have been comparatively small, and their growth rates have been slow enough to where resources can renew themselves. Our current global society has, oh, maybe 6.2 billion members. This dwarfs all previous humans societies, and depletion of the resources that we need to collectively survive is a legitimate concern. Because of the finite nature of global resources, there will come a point when we are no longer able to increase input into our economy in order to increase output (I'm sorry if people find this whole model simplistic; it is. I've never had any formal economics instruction). This will theoretically result in a scenario where an increase in productivity is the only mode by which to increase overall output. Our current rate of technological progress seems to suggest that it might be possible to deal with increasing demand and the capitalist need for growth by increasing productivity alone. Yet, I wonder how effective or sustainable this will be. Indeed, the act of increasing productivity consumes resources too. I'm not sure what this means for the future. I'll leave that for the reader to decide.

This brings me to my second and more interesting point. We have established that capitalism is heavily reliant on growth for its success. Population experts have estimated that the global population growth rate has now stopped increasing. Estimates also predict that the global population will round off and stabilize within the next hundred years, probably around 9 billion people. It's essentially impossible to predict growth after that. If birthrates in developing countries continue to decline, or disease becomes widespread, we may even see some population decline. Please do keep in mind, however, that population estimation is more like voodoo art than science. But let's say that these estimates hold true. Let's also say that after the population rounds off, it holds steady, fluctuating somewhere between 8 and 9 billion people. That seems reasonable to me. Remember that capitalism relies on growth to succeed. Ahhh... yes. Now you see a little problem. Part of an economy's ability to sustain growth is have a matching demand. If you have lots of growth and little demand, then you end up with scenarios like the Panic of 1893 and the Great Depression (I'm oversimplifying again, but bear with me. There was also major debt and other things that precipitated these crisises). So how do you get growth in demand? The logical reasons that I can think of are population growth and quality of life growth. If population growth grinds to 0, that means that we will rely solely on a demand for quality of life increases for our economic growth. Once the developing world is brought up to an acceptable level of quality of life, where will demand come from? It is conceivable that the demand for a better quality of life will always remain; after all, life is never perfect. Nevertheless, our limited of resources hinders our ability to develop indefinately. It seems to me that in the future, both the means and the motivation for economic growth could possibly disappear. Is this likely? I have no clue. Is it even probable? I would say yes, but maybe I'm completely wrong... in fact, I'd be surprised if I wasn't. If these things do happen, I'm guessing that this will constitute the end of the capitalist system, and the beginning of an economic system very different than the ones seen in the past 4000 years. It could be for better or for worse. I'd guess for better, but only because I think all of this political and economic competition that has characterized human development is counterproductive (We're studying WWI in US History, and it's a perfect example of this. It was quite possibly the most incredibly stupid war ever... yes... worse than the Civil War. All the millions dead from this war essentially lost their lives over an imperialist squabble. True, WWII was pretty stupid: a crazed German supremacist who wanted to take over the world. But at least you can find a clear good guy and a bad guy; you can justify it to yourself. WWI is just insane.). I think we should just be set down our guns and work together to make everyone happy. Then again, I'm an idealist in that sense. That's simply not how humans are capable of functioning in large societies.

Anyway, that was my latest set of thoughts. Even if they're dead wrong (as they likely are), I hope they help your own thinking in some way.