Capitalism is not perfect

For a long time I have suspected that there is a fundamental problem with Capitalism. My conclusion of the years is that like any other system it has it's advantages and disadvantages. Nothing is ever perfect. We can't live without it, but at the same time we find it has it's inevitable problems.

The real question to me is whether capitalism is sustainable in the very long term? Imagine if life expectancy could be boosted significantly and the pensionable age was lifted to 175 years. Would we want to change the current rules or unspoken guidelines between what's okay and what isn't?

One of my little pet fears is that capitalism in it's current guise drives unsustainable behaviour.

The problem with Capitalism is that it drives decision making based on making profit and practically nothing else. The philosophical and moral reasons for doing things become overwhelmed by the profit motive, or at the bottom of the inequality pyramid, by the essential need to survive in a system that threatens people's very livelihoods and survival. Injustices and imbalances are sometimes addressed by financial mechanisms, the best example being the cap and trade system, which was first successfully used to reduce sulphur dioxide emissions to atmosphere (which was causing acid rain).

I have reasons to believe that the link between the environment and capitalist costing models is fundamentally wrong. The continued increase in greenhouse gas emissions is a testament to this. Mechanisms like CDM and carbon trading have been put in place in an attempt to start addressing the problem but the mechanisms are too simplistic and not adequately cross linked to all the elements of Capitalism that come into contact with the environment.

The most significant problem is that the true value of environmental services are not built into the costs of goods and services that take them for granted. Examples like the work that bees do for us to pollinate our food. The work that algae and bacteria do to help us clean our water. The work that trees do to recycle carbon dioxide and regenerate oxygen. The value of biodiversity is not fully understood and is certainly not valued in Capitalism.

I use the term Capitalism synonymously with economics, in the hope that those who are fastidious about semantics will forgive me for the general references to anything that involves money, cash, credit, debt etc.

I will elaborate more on this in the days and months ahead.