As we see the video in our class known as, ‘Is Walmart Good For America?’, I was wondering who might be the biggest culprit for the weakening of American economy. American economy was unmatched and unrivaled back in the 50’s, 60’s, 70’s and 80’s. However, things are gradually changing and America has a huge competitor in the shape of China. America’s economy is also not in the strongest shape like it was used to be. A lot of expert opinions are blaming big corporations like Walmart and others for outsourcing way too much job to low-wage countries and thus creating this problem. However, I do think we can’t solely blame companies like Walmart for this downfall.
Most of the richest nations around the world have been built with capitalist economic system. It has been very successful for the last one or two centuries. United States is not exceptional in this case; it has embraced capitalism since its introduction. Capitalism might be hugely successful in recent history, but I think that this system has its flaws as well. There are some basic theories about the modern capitalism. United States has become a huge example of corporate capitalism. Some of the characteristics of capitalism that is hurting United States in my opinion is:
1) Capitalism encourages and absolute proliferation of profit, especially corporate capitalism. Thus the system itself creates an atmosphere for the business institutions to be greedy.
2) In a lot of cases, government don’t intervene about the price regulations in a lot of different sectors (specially in retail sector) of business, thus it gives an opportunity to maintain the flow of the market with freedom which might creates monopoly in some business sectors. Walmart always have an opportunity to set their price in a record low level and driving their competitors out of business.
3) Most of the developed countries have gradually improved their standard of living to come to this position. In the process, normally inflation occurs in this country, thus driving the wage of workers high. Comparing the national annual income, US (44000 $) is much higher compared to China (almost 8000$).
4) Capitalism also believes in cheap labor theory (at least in modern day) in order to maximize profit. Thus, a lot of jobs have become easy picking for foreign countries.
I have put a video, where a senior sociology scholar named Emmanuel Wallerstein talks about how ‘Capitalism’ itself becomes the problem and how it plays part for orchestrating a worldwide recession. Personally, I do think that capitalism is a very good economic structure. However, I think that it needs some reforms. Some rules and regulations might be changed in order to make this system credible again. For example, US government can put an minimum price tag for different retail products. Not only it will create a level playing field for different big corporations, but also restrains this destructive practice from big corporations like Walmart to offer cheap products and driving others out of business. Make no mistake about it, big corporations are somewhat responsible for this current situation, but the biggest liability would definitely fall into the shoulders of this overall economic structure.
I would very much like to know what other people are thinking about this issue. I am very much looking forward to your opinion.