Is Now the end of Capitalism?

 
Up until recently, the Edelman Trust Barometer had recorded from citizens of the world a generally positive outlook on our core social institutions regarding government, business, NGO and media.

The start of 2020 did not look too good for capitalism as data obtained from 34,000 people across 28 countries showed that 56% of  people felt that capitalism today "does more harm than good". Strangely enough, this trend undermines the reality that our global economy is at one of its strongest this year with near full employment.

This underdog of a result suggest that people have poor confidence of what the future holds for them, in all its financial-peace-security-governmental sense.

But this isn't the first time people are turning their backs against capitalism. There are many supposed instances of capitalism's failures in the past that serves as a reminder of how fragile this system really is.

Or is it?

Enter: the Great Depression from 1929 to 1933. This period of time marked the worst economic downturn in the entire history of the industrialized world. The 4 years that defined the global economy was the longest and deepest in the 20th century.

During the Great Depression, worldwide Gross Domestic Product (GDP) dropped a staggering 15 percent versus just around 1% during the Great Recession in 2008. International trade sunk 50% and unemployment rate around the world went as high as 33%.

The Great Depression was truly the poster child of how freaking bad a decline in the global economy can become. What caused it? The collapse of the free enterprise due to its own weight, and the unfettered capitalism machine.

Enter (2): the Love Canal tragedy. From 1942 to 1953, the Hooker Chemical Company was granted a government sanction to dispose chemical waste into the partially dug canal. At its peak, it contained 21,000 tonnes of toxic compounds in which at least twelve were identified as harmful carcinogens.

The 16 acre dumpsite wasteland was capped with clay and sold to the Niagara Falls School Board with a pretty crazy disclaimer: a warning of its past. I don't know what the Board was thinking but I guess f*ck it right!? Land ain't cheap.

Anyways, nothing much happened thereafter. It seemed like everything was A-okay...not. In the 1970s, health surveys were conducted in the area to determine what the hell was causing all these cases of epilepsy, migraines, asthma, nephrosis and extremely high rates of birth defects and miscarriages. Spoilers Alert: Yes, it was the damn chemicals from the Hooker. 

The chemical waste rose to the surface and found its way into basements and yards of the neighborhood - causing all these health problems.

Reason? The hunger for profits, and the unwillingness to conduct ethical business. Sounds familiar with a certain ideology, eh?

Enter (3) the little Hardworking Children aka child laborers.

The Industrial Revolution witnessed a shitload increase in productivity, technological advancements, world trade bull-rushing, and rapid urban population growth. Maddening stuff, and it all happened back in 1750.

For some time, people really started thinking: All good things must come to an end, right? Well, critics of capitalism claims that this has resulted in an explosion of child labor - children working in hazardous conditions like a smoke churning factory. These critics posit this as the indisputable indictment of the evil, ugly and face-full-of-acne capitalist system.

Cheap labor spurred this rapid rise in "free labour" children: children whom were given permission by parents to go to work in factories. And because many people associate cheap labor with capitalism, they just go along with it.

Enter (4) the Housing Bubble and the 2008 financial crisis

The Housing Bubble refers to the real estate bubble that affected over half of the United States in 2008. This was said to have played a major factor in the lead up to the 2008 financial crisis.

Basically, what defined the Housing Bubble was the high rates of foreclosures among US homeowners, and declining home prices that eventually led to a crisis of subprime, Alt-A, collateralized debt obligation, mortgage, hedge fund, credit and foreign banks.

A collapse of this sort has the capabilities to affect home valuations, mortgage markets, homeowners, real estate firms and foreign banks. It's something akin to a ticking time bomb - no - a ticking nuclear time bomb with spikes.

As a remedy to this, the administration at the time agreed to provide a limited bailout for US homeowners who were unable to repay their mortgage debts. This sort of solved the problem, but costed the US government an approximately $900 billion dollars.

Who was the evil puppeteer behind all this? Capitalism, of course. The Federal Reserve hoped to create easy money by lowering interest rate - increasing stock prices and ultimately creating the bubble.