I refer to the Malaysiakini article Actually, free market capitalism is good!

The writer asserted that government intervention is partly to blame for the economic crisis. Based on this observation, the writer concludes that free market capitalism is good, and socialism is bad.

Socialism is the struggle of the working class for equitable distribution of wealth. According to Marx’s analysis, in a capitalist system, the bourgeoisie grow richer through capital reinvestment while the proletariat’s poverty is perpetuated.

The latter has no means to accumulate capital as they are paid only a subsistence salary. This inherent bias is manifested in the increase of the Gini coefficient across most capitalist economies indicating increasing wealth disparity in society.

Socialists advocate governmental intervention to keep the social and economic balance between the bourgeoisie and the proletariat on an even keel. Naturally, socialists espouse governmental intervention that favours the working class over the capitalists.

Unfortunately, the examples that the writer presents to discredit socialism are neutral at best, and favour the capitalists at worst. Clearly, the guarantee of the infallibility of certain companies and the granting of privileged roles to certain credit rating agencies by the government do not favour the working class as the working class does not own these economic entities.

The writer was not very specific on his critique of the government’s flawed monetary policies and regulations, I assume he meant the lax monetary policies of the US central bank and the continuous deregulation of the US financial market which led to the current economic crisis.

These regulatory initiatives were formulated to stimulate economic growth and in no way carry a socialist agenda. In fact, the latter initiative facilitated the formation of various financial instruments which enabled financial institutions and the elite few to rake in record profits.

The writer also used the role of government-linked companies such as Freddie Mac and Fannie Mae in the economic crisis to discredit socialism. Although they are government-sponsored, they function as privately-owned corporate entities whose primary objective is profit.

Over the decades, they provide reliable liquidity to financial institutions for the latter to lend to home-buyers. In other words, they enable financial institutions, construction and real estate companies to profit continually from the housing industry while at the same time skimming off a nice profit for themselves.

Although this arrangement has indeed enabled many from the low-income group in the US to own homes, it hardly qualifies as socialism. A socialist’ approach would be to legislate a national housing policy to ensure affordable housing for all instead of creating another avenue for profits for corporations as in the case of Freddie Mac and Fannie Mae.

In the local scene, the Malaysian government has also distorted the labour market by allowing the importation of migrant workers. The flooding of low-wage workers serves to depress the wages of local workers all in the name of higher profits for the corporations. Can this be called socialism too?

Ultimately, free market proponents should understand that government intervention is not limited only to those that favour the working class. More often than not, governmental intervention favours the capitalists. Socialists do not support any initiative that favours the rich over the poor. It is therefore misleading to equate the examples that the writer gave with socialism.

The writer also highlighted the explosive growth of China and India to support the case for free market capitalism. However, the writer did not mention that China’s progress came at a tremendous price.

Shenzhen, the crown jewel of China’s industrial engine, is so polluted that many consider its tap water to be unsafe for consumption. China also suffers from severe income disparity for which its Gini coefficient has exceeded that of the US’.

In addition, urbanisation has resulted in serious social problems such as an escalating crime rate and untold misery for migrant workers who are denied social services.

In view of such consequences, perhaps it is appropriate to seek alternatives rather than blindly pursuing GDP growth. A new holistic approach to development is needed that is socially just, economically viable and environmentally sustainable.

Let us be reminded of the warning that more than 200 climate scientists issued to the United Nations Climate Conference at the end of 2007 on the urgency to act against climate change.

As there were no real regulatory restrictions on greenhouse gases until recently, the writer may need to be reminded that unbridled capitalism is what got us into this environmental mess in the first place.