By Dr. Muzaffar Iqbal

The demise of the USSR did not alter the contours of the world; it merely made a small dent in the global distribution of power. To be sure, it ended the cold war, consolidated the gains of World War II for the Western world, liberated a small part of Europe from the iron clutches of communism, and led us into the nightmare of a unipolar world. While communism was wedded to dictatorship, capitalism has always been branded as eternally married to liberal democracy. A closer examination, however, reveals capitalism is, in many ways, the alter ego of communism and it is ethically as bankrupt as communism.

This was not apparent until recently, but now there are early signs of disappearance of the façade. People around the world are discovering the new face of capitalism as they march on the streets of financial capitals of the world amidst fears of a global economic collapse. Indeed, the global economy is under strain of an order it has never witnessed before. Movements as “Occupy Wall Street” are not only insisting that this is the case, they are, in fact, the desperate calls of humanity for release from the iron clutches of a morally bankrupt system. They are not only signs of discontent against an economic system, they are simultaneously indicative of a lack of confidence in the political system; people have finally realized that there is no choice left for them politically except to vote for one of the two parties, both of which sell the same goods.

These early signs may not be the start of the demise of capitalism, but there is no doubt that all brands of capitalism—the anglo-saxon, the neoliberalism, the Chinese-Singaporean capitalism with Asian values—all are fracturing from within. The most apparent indicators are emerging from USA where, according to the U.S. Census Bureau data released on September 13th, 2011, the nation’s poverty rate rose to 15.1% in 2010, up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. The economic situation of other countries in the Western world is not rosy either. In fact, millions of people are now living under the looming shadow of economic collapse which may trigger mass social unrest.

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After putting bandages on the Greek economy, the leaders of the Western world—the so-called G20 countries—are now preparing for emergency talks on averting a return to worldwide recession. While they move to the next emergency, the Greek bandages are already falling apart because of the popular discontent at the terms of the deal which has forced George Papandrou, the Greek Prime Minister, to seek a referendum on the deal which took months to finalize. While Europe deals with defaulting countries, the United Nations’ International Labour Organisation (ILO) has warned of the social effects of the continuing economic crisis, which could take until 2016 for global employment to return to the levels of three years ago.

No one from within the Western political leadership seems ready to acknowledge that there is something seriously wrong with the system; they are all looking for minor tune-ups and they are all living in the self-created utopia of a happy marriage between capitalism and the political system which has beget them. The magic cure they have found is creation of jobs through state-sponsored projects. Mega projects were first announced by President Obama, then by the Canadian Prime Minister and the latest came from David Cameron, who announced a fresh drive to create jobs through major infrastructure projects last week. This includes the construction of power plants at Ferrybridge, West Yorkshire, and Thorpe Marsh, South Yorkshire, creating 1,000 construction jobs.

The economic strains are translating into political strains: many citizens of Western democracy are realizing that though they live in so-called free societies, with elections every five years, authoritarianism is creeping at such a rate that its breath is upon their necks. Security threats have been blown out of proportion to institutionalize repression in the name of security: callous anti-terrorism laws passed by Bush-Blair and Co. now routinely insult passengers at airports, the camp outside St Paul’s Cathedral can’t be allowed, those who have finally come together to seek justice will be overcome, defeated by any means necessary, the right to peaceful protest notwithstanding.

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This is not to say that there is no one in the Western world who is ready to acknowledge the inherent bankruptcy of capitalism; it is just that such voices are considered “interesting” and cast aside. The nameless millions living below poverty level are told that they are still better than millions out there, in the so-called developing world and there is no alternative to capitalism so they had better be silent. This breeds hopelessness, disempowerment, doom and gloom, which then translates into individual tragedies.

A recent work by Ha-joon Chang, a South Korean economist, currently a Reader in the Political Economy of Development, University of Cambridge, 23 Things They Don’t Tell You About Capitalism lays bare certain long-standing myths about capitalism. These are not shocking disclosures; merely common sense truths supported by fact and logic. Chang is not anti-capitalist, he simply recognizes the failings of centrally planned economies, describes capitalism as “the worst economic system except for all the others”. His book shows capitalism as it actually operates, but does not look deeper than that: he is not interested in looking at the links between capitalism and “democratic authoritarianism”; nor at the fundamental flaws of the system, yet it is instructive to see these insights from within the system.

What remains to be seen is how Capitalism will eventually come to its logical end and what will emerge from the rubble. There are no alternatives available for the Western world. The new and emerging economies in Asia, likewise, have no alternative; they will simply emulate the Western model with a sprinkle of Asian values. The slick veneer that has camouflaged the inherent ills of capitalism is now tearing and the world is finally able to make connections between events: the disgraceful Victorian work practices, the terror unleashed by Thatcher’s special police forces on black and Asian people and miners in the 1980s, and the current union of the high churchmen with the City of London are not isolated instances of failure of the system; they are veritable signs of its inherent moral bankruptcy.