Economist and social scientist Prabhat Patnaik has called for workers’ initiatives to protect mankind from the clutches of globalized finance by overthrowing neo-liberal capitalism and to move towards a socialist society on ‘Age of Finance Capital’ at the annual EMS Smriti programme organized with the theme ‘UN Declaration of New International Economic Order-1974, a revisit’.

Introduction to Capitalism

• Capitalism is an economic system where private individuals or businesses own the means of production and operate for profit.
• It is characterised by the free market, competition, and the pursuit of individual self-interest.
• Capitalism promotes private property rights, entrepreneurship, and the accumulation of wealth.

Types of Capitalism

• Mercantilism: Nationalist system mixing national business interests with state interest and imperialism.
• Free-Market Economy: Prices for goods and services set freely by supply and demand without government interference.
• Social Market Economy: Limited government involvement in price formation, with the state providing substantial services in social security, unemployment benefits, and recognition of labor rights.
• Rhine Capitalism: Modern model found in continental Western Europe, adapting the social market model.
• State Capitalism: State ownership of means of production, with state enterprises operating as profit-seeking businesses.
• Corporate Capitalism: Free or mixed-market economy characterized by hierarchical, bureaucratic corporations.
• Mixed Economy: Market-based system with both private and public ownership of the means of production and government intervention to address market failures, reduce unemployment, and control inflation.

Positive Impact of Capitalism

• Economic Growth and Innovation: Capitalism fosters competition, entrepreneurship, and market dynamics, driving economic growth, innovation, and technological advancements.
• Individual Freedom and Choice: Capitalism promotes individual freedoms, including economic freedom, allowing individuals to make choices regarding employment, consumption, and investment.
• Efficient Resource Allocation: Market mechanisms in capitalism facilitate efficient allocation of resources, as prices and competition guide production and consumption decisions.
• Wealth Creation and Prosperity: Capitalism has the potential to generate wealth and improve living standards through increased productivity, job creation, and wealth accumulation.
• Incentives for Productivity and Innovation: Capitalism's focus on profit incentivizes productivity and innovation, as individuals and businesses strive to succeed and gain a competitive edge.

Negative Impact of Capitalism

• Income Inequality: Capitalism can lead to income disparities and wealth concentration, with a small portion of the population amassing significant wealth while others struggle with poverty and limited opportunities.
• Social and Economic Exclusion: The pursuit of profit in capitalism may exclude marginalized groups, leading to social divisions and limited access to resources and opportunities.
• Market Failures: Capitalist markets are prone to market failures, such as monopolies, externalities, and information asymmetry, which can result in inefficiencies and inequities.
• Environmental Degradation: Unregulated capitalism can prioritize profit over environmental sustainability, leading to resource depletion, pollution, and ecological damage.

Instability and Financial Crises: Capitalist economies are susceptible to economic recessions, financial crises, and speculative bubbles, which can disrupt livelihoods and destabilize the economy.