Is this the beginning of the end of Capitalism as we know it?
Vignesh Naidu
Fintech Product Leader | Digital Lending & Growth Strategy | Platform Leadership | VP of Product | 0-to-1 Product Development | Strategic Partnerships | Cross-Functional Leadership
I just finished reading a cracked.com article that detailed about why most of urban America voted for the democrats
and rural for the Trump. The underlying tone of the article was that the people of rural America wanted revert to their "way of life" and trump is the "ass-hole" everyone wants in their group to take on the enemies. Basically,the overall trend in the western hemisphere is to call for nationalism, pride and return to the "good old days".
Why did this sudden change in mood happen? Why did UK elect to leave EU? Why did America elect Trump?. The rally call of the politicians who recently won has been remarkably same and reminds of South Park. "They took our jobs. Bastards!". Let's take a step back here. No jobs that we were taken were offered due to any altruistic intentions. People got these jobs because they were much better at the same cost or way cheaper for the same talent. Thus both immigration and outsourcing are the very threads of Capitalism whose core principles revolve around giving the job to the person who can do it at best.
Western firms outsourced jobs to post massive profits for investors and good salaries for managerial staff in their own countries. Western countries considered this good and amended these laws till the time that there were ample jobs in their country for their own countrymen.
Now that there has been a prolonged economic downturn that started in 2008 and there is no sight of significant recovery,capitalism dictates cutting higher cost jobs compared to lower cost jobs to save profits. This led to higher job losses in "front offices" than "back offices" and there is a cry for getting back those jobs. Ultimately, this is normal human behavior, a selfish cry for it's own survival. It is similar to banking executives taking in big bonuses during the good days and taking tax payer money for bailout in bad days. This phenomenon is natural and will continue. The extent of the current scenario however paints a grave picture.
As more and more western countries vote in their populist leaders, there is a global contagion of closing down of economies. Trump has already started talking about renegotiating trade deals, ending aid to many countries. Other developed nations will follow suit. What will ultimately result is a back to the past of closed economies that are probably warring for resources. Even if there is no war, Capitalism will cause companies in these nations to lay off more people or wind down operations in order to show that "return" for the investors, causing a self destructive circle. At some point there will be another politically savvy leader who will promise jobs and take government control of private enterprises to aid the "common man".
All the doctrines which said "to each his own" may no longer hold valid. At the end of the day, the world still seems to be operating on a "zero sum" game principle. For one country to "win" another needs to "lose". Today USA fees China is winning at the cost of USA losing and UK feels it is losing to EU. It is really the time to think beyond boundaries and think of what will benefit humanity as whole.
CFO | Finance Transformation | Start-up Finance
8 å¹´In today's time protectionist approach will not work. Every decision has other side to it. Outsourcing is one phenomenon, lot of consumables and electronic are consumed by US from the east and they also generate revenue on engineering services. I would prefer wait and watch, and see how much he succeed in walking his talks !!!