Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin.
—MOTHER TERESA
I wrote Confronting Capitalism: Real Solutions for a Troubled Economic System in order to better understand the role of capitalism in today’s world economy. Capitalism is the chief mode of operation in most of the world’s economies. It promises to lead to better economic performance, innovation, and value creation than any competing system such as communism or fascism. This is not to ignore its major shortcomings. I believe these shortcomings can be addressed with solutions that will improve people’s lives.
The fourteen shortcomings are not independent of each other. They are highly interrelated. The problem of poverty is part of the problem of income inequality, which itself leads to low demand, which leads to too much unemployment, which leads to a clash between austerity and stimulus as two potential remedies, which is handicapped by political lobbying that gets legislators to vote for the causes that will keep them in power and therefore not vote for financial regulation and more environmental protection, and so on.
All this means that in working on any one problem, such as higher minimum wages, so many other issues come into play, such as some businesses possibly closing down, thus creating fewer jobs and more unemployment and incentivizing companies to import more goods from abroad, which leads to even less employment at home, and so on.
Legislators in a democracy tend to vote on one big issue at a time, neglecting these vast interconnections. Furthermore, they tend to prefer short-term solutions rather than to work on more difficult, long-term solutions. Failing to find long-term solutions is the cause of so many short-term problems.
Some people may throw up their arms in despair, given the odds of solving most of the shortcomings of capitalism. I am an optimist. I believe that there are enough intelligent, talented, and committed people who want to talk about these problems and hopefully create and agree on reasonable solutions. I mention solutions to each of these problems as a stimulus to thinking, knowing that a great amount of work must go into any final proposals. Hopefully, you the reader share my wish to improve the lives of people by helping capitalism work more effectively to bring about more material and spiritual well-being to the world’s people.