One often hears that the current state of technological advancement was only made possible by free market capitalism. This is true. When I started collecting my thoughts anti-free market capitalism globalization, I was worried that this issue would be a challenging one to address. Even for someone who has decided that free market capitalism brings about more harm to humanity than good, it may be hard to come to terms with the loss of technological advancement in a non-free market capitalist system. I also share such concern. At the same time, I believe that we are losing in exchange of such technological advances is too much to be ignored. My moral scale tells me that sacrificing iphone or a car that parks itself is less important than letting a human being die from diarrhea in Africa. In other words, if inducing less inequality in the world reduces the incentive for businesses to invest in luxury items that add very little real value to human life (such as a robot that cooks and cleans the house), so be it.
Free market capitalism has been a major force in accelerating the rate of technological innovations. Due to the nature of this economic model, fierce competition has incentivized major efforts towards technological advancement. However, free market capitalism is with no stretch of imagination the mother or the sole factor in making technological advancements possible. Most fundamental human innovations such as the wheel, crankshaft, steam engines and electricity—which were the basis of the industrial revolution—were primarily designed out of need and ingenuity rather than direct investment. I would like to call such innovations: need-based innovations. The technological advancement that may slow down by the demise of free market capitalism is based on direct investment on innovation by capitalists/investors. It is the type of technological advancement that contributes mostly to luxuries than to dire needs. I would like to call them investment-based innovations.
Investment based innovations are often useful and lead to more efficiency. However, in a world where “27,000 children die every day from preventable causes,” such innovations are at best wasteful. Advocates of free market capitalism, however, managed to disguise the perils of this system using tools such as economics, monetary system, propaganda, and etc.
Upon a shift away from free market capitalism another decline, that is both parallel to and a result of the possible decrease in the speed and scale of current innovations, may occur. That is a likely slowdown of consumption and possible redirection of investment from large and efficient production sites or service providers. In other words, general efficiency in production will decrease in the world as a whole. While accepting this as a valid argument, I contend that to understand the logic behind anti-free market case, this loss should be juxtaposed to the objectives of such a shift towards a more regulated world market.
Lets take the recent discussion of healthcare in the U.S. to illuminate this discussion. One could argue that the current state of healthcare in the U.S. is very efficient (in economic terms). Health care in the U.S. is left to the market. Even the very limited government programs that aim at ensuring healthcare for the very poor (Medicaid and Medicare) leave the service provision part of the equilibrium to the market. The single payer healthcare system that is not receiving enough support among the legislature as well as the Obama administration, would indeed lead to less efficiency within the healthcare system. Instead, single payer healthcare has an inherent equalizing aspect in it. It is funded by the tax money, which means that it takes money from the rich and healthy and transfers it to the poor and unhealthy. This means that the poor and unhealthy will not get punished twice: once for not having the means to be competitive in the job market and second for not being able to pay for their healthcare.
The ultimate objective of a healthcare system is to ensure that the populace has access to affordable healthcare (regardless of their level of income). It is no secret that this objective has not been achieved within the present healthcare structure. The disadvantage of a single payer healthcare—i.e. inefficiency in economic terms—should be examined in comparison to its advantage—i.e. its equalizing nature. I would argue that ensuring necessary care for a disadvantaged child or a senior citizen who is no longer capable of providing for him or herself, way overweighs the loss that will incur to the wealthy healthcare providers.
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