The triumph of capitalism

This month marks the 30th anniversary of the official end of the USSR and its disastrous experiment in communism: a system with its internal contradictions that has miserably failed humanity.

The winning philosophy, capitalism, a more economically efficient system that can better harness human creativity, ingenuity, which reinforces a sociopolitical arrangement that grants primacy to individual autonomy and expression, has triumphed.

Think about these visionary leaders and the technologies they introduced, all from a system that now defines how we work and live: Bill Gates (Microsoft), Steve Jobs (Apple), Jeff Bezos (Amazon), Tim Berners-Lee (the Internet), Larry Page (Google), and Mark Zuckerberg (Facebook). Their uncompromising vision, including a passion to change the world, a willingness to take risks, and exceptional business acumen now define society. Could you fathom a world without email, the internet, a smartphone, and social media? Here are some other insights on how capitalism contributed to the greater good of humanity.

Capitalism created the environment to produce a range of new technologies that fundamentally alter the way we work, live, transact business, and relate to one another with such groundbreaking tools like blockchain, digital transformation, 5G Networks, financial technology, artificial intelligence, cloud computing, robotics, the Internet of Things, autonomous vehicles, 3-D printing, and biotechnology approaching critical mass amid an everchanging world. Digital natives like Airbnb, Uber, and Spotify have all revolutionized the hospitality, taxi, and music business through cost reduction and customer expectations all under a capitalist system.

Apart from the above, such behemoths like General Electric (GE), General Motors (GM), Ford, Proctor & Gamble, Deer, Caterpillar, Boeing, Shell, Exxon, Hewlett-Packard, AT&T, Pfizer, etc., and other great companies in industrial products, housebuilding materials, machinery, equipment, consumer products, farming, food production, information technology, finance, investment and commercial banking (including SWIFT - the global messaging system used by financial institutions that move billions around the world on a daily basis), all came out of a capitalist system.

Capitalism laid the foundations for modern banking and finance, educational and industrial growth, the development of the arts, modern music, technological developments, advancements in science and medicine - to name a few. Non-traditional learning has played a pivotal part in the history of further education. The system under which any person, possessing stipulated preliminary qualifications, might register as an external student of a university or professional body and, in due course, enter for an examination of a standard exactly parallel with that taken by internal students, was surely one of the notable educational inventions ever since its genesis in the nineteenth century under capitalism. It has also provided the possibility of earning a degree or designation for many thousands of people who had no opportunity of entering a university.

The fusion of three key factors, all from a capitalist environment altered the world forever; printing, the HinduArabic numerals 0 to 9 (which gave rise to mercantile capitalism and the creation of wealth) whilst creating double-entry book-keeping. Humanity’s concept of wealth, its measurements, creation, and distribution could not have been achieved had it not been for these factors.

The world owes much to India for such monumental changes sparked by the numerals 0 to 9 which in turn were used to develop current double-entry book-keeping and ultimately led to human progress in many systems. Our lives are now intertwined with both financial and non-financial numbers. When you look at any financial statement or report, you are essentially looking at the use of the digits 0 to 9 in all their varying forms to measure financial health, growth, and returns. The death of Latin as the universal language of Europe and its gradual replacement by the language of science, whose underpinning was mathematics, was enabled by the Hindu-Arabic numerals 0 to 9 which played a pivotal role. The numerals made possible the triumph of science and the rise of mathematics as the universal language.

Double-entry book-keeping drove the new economic engine of Europe: industrialization which in turn gave rise to joint stock companies and a new profession accounting – the presentation and interpretation of the results of double-entry book-keeping to assess performance and the financial position at a given date.

Double entry book-keeping also played a prominent key role in world history and the development of capitalism. Nearly all the demands made for business information were met within the framework of double-entry book-keeping. It enabled the recording and interpretation of business transactions; distinguished between capital and income; differentiated private expenses and corporate costs; and produced data for decision-making. It gave rise to accounting and other accountingrelated subjects: auditing, cost accounting, management accounting, and financial management.

Capitalism has changed the world more than all its wars, revolutions, and revolts in history. It created more prosperity and progress for more people than any system in human history. It has lifted hundreds of millions out of poverty, reshaped the world over and over with ground-breaking technologies, and created a worldwide middle class who enjoy a lifestyle unmatched in all of history. Indeed, capitalism has created more prosperity and progress for more people than any system in human history.

Yours faithfully,

Lal Balkaran