Essay – Can capitalism bring inclusive growth?
Can capitalism bring inclusive growth? Essay: Capitalism can be defined as an economic and political framework where policies, rules and regulation concerning a nation’s a trade and commerce is determined by private ownership as opposed to complete state-controlled economies such as India and Russia. The flag bearer of Capitalism is the United States of America, which naturally was the breeding ground of economic policy. However, the term capitalism was coined by the Scottish political economist Adam Smith in the 18th century while he was exploring the concentration of wealth and its ability to garner political and administrative power.
Discussion
India opted to be a socialist economy post-independence on 15 August 1947 with a mixed economy of privatized industries along with state-controlled trade laws overseeing the entire economic system. A mixed economy was thought to be best suited for an economy like India which sheltered vast diversities in economic and social spheres of life. On one hand, India was heavily reliant on agriculture to sustain its economy and attempted to build an industrial base that could facilitate the development of the nation. The debate of whether capitalism would bring inclusive growth to a society like India which shelters vast diversity has existed since its independence.
The Report submitted by the Oxfam Corporation in 2016 stated that only 1% of the world’s population owns more wealth than the rest. The concept of inclusive growth and capitalism are mutually opposed to one another. Inclusive growth aims at uniform rewards for all sections of society whereas the main objective of capitalism is to earn profits irrespective of uniform development of all sections of society. The core concept of either of the ideologies is incongruent with a developing nation like India. For instance, the rate of affluent sections of society has increased to 6% in India whereas the majority of India’s population belongs to the working middle class. The recent statistics provided by the World Bank state that 10% of India’s population belongs below the poverty line.
Capitalism is unlikely to bring in inclusive growth, especially for underprivileged sections of society such as agricultural sectors and labour industries where owners aim at maximizing profits rather than paying dignified wages to workers. It is in such instances that the old proverb, “ In India, A farmer is born in debt, lives in debt, dies in debt and is reborn in debt” becomes a reality as statistics point out that around sixty farmers commit suicide in a year. The employment rate of graduates in India is accounted for only 47% which reveals that despite education capitalism is futile for inclusive growth as long as wages are available at a dignified rate.
Conclusion
In conclusion, capitalism is a double-edged sword that is apparently profitable and can be efficient in the development of a nation. However, it is implausible for a nation like India with vast social and economic diversities. A full-fledged capitalist economy would polarize the entire population with one section acquiring all the wealth while the other dwelling in poverty. An entire capitalist economy would bring in the historic feudal society.
FAQS related to Can capitalism bring inclusive growth?
Q1. What is Capitalism?
Ans: Capitalism can be defined as an economic and political framework where policies, rules and regulation concerning a nation’s a trade and commerce is determined by private ownership as opposed to complete state-controlled economies such as India and Russia.
Q2. Who coined the term capitalism?
Ans: capitalism was coined by the Scottish political economist Adam Smith in the 18th century while he was exploring the concentration of wealth and its ability to garner political and administrative power.
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