As per his usual perspective, Umair Haque explains ‘Why Capitalism is Obsolete (And Why Humanity’s Future Depends on What’s Next)‘. His view is generally that capitalism is obsolete because it can’t resolve the major issues facing humanity now such as climate change, energy supply etc. And more generally, capitalism would not be able to solve complex issues.
There is some irony in this paper as he takes ITER as an example of why capitalism is obsolete. But ITER is on the contrary quite an example of a centrally planned organisation gone wrong and struggling to deliver.
Anyway, I do not agree with his point on complexity. Capitalism as a way to force change on the economy through innovation still works, and it has easily made centrally planned economies obsolete. There is power in decentralisation and letting innovation compete. And actually capitalism is the best system we have found so far to address the increasing complexity of our world, through its self-regulation loops on some aspects.
It is true that capitalism does not solve the tragedy of the commons or longer term infrastructure issues, because everyone tries to exploit as much as possible of the common resources; and this is why strong regulation on top of capitalism is needed, as well as subsidization of long term commitments. Regulation is also needed to find some balance in society.
We have to find the right balance of regulation and market forces. There will always be some balancing act and the optimised point will need some searching, but I am still confident that regulated capitalism will find solutions to complex issues much faster than any other available system.
