Capitalism is breaking down

Former RBI governor Raghuram Rajan has warned "I think capitalism is under serious threat because it's stopped providing for the many, and when that happens, the many revolt against capitalism." He said governments cannot afford to ignore social inequality when considering the economy.

• It was possible in the past to obtain a middle class job with modest education. But the landscape has changed in the wake of the 2008 global financial crisis and the resulting austerity. Now, if you really want to succeed, you need a really good education.
• Unfortunately, the very communities that are hit by the forces of global trade and global information tend to be communities which have deteriorating schools, rising crime, rising social illnesses and are unable to prepare their members for the global economy.
• A S&P Global Ratings report suggests another global credit downturn is possible. Since 2008, government debt has risen 77% while corporate debt is up 51%.
• Capitalism is breaking down because it is not providing equal opportunities. And the people who are falling off are in a much worse situation.
• Authoritarian regimes arise when you socialize all the means of production. A balance is needed, you can't pick and choose - what you need to do is improve opportunity.
• Governments must give people evolution, or the people will give the governments revolution. 
• Sooner or later; capitalism will also need to absorb the fact that the planet's population cannot be allowed to keep increasing at current and past rates; to provide it with ever greater supply of consumers.
• Capitalism has failed with only a few at the top benefiting excessively, and accountants and lawyers being perceived as more important than doctors, engineers, and scientists, who actually benefit the country.
• Capitalism has many faults but the socialism has never worked either.

Abraham Lincoln in his second inaugural address declared that democracy is the “government of the people, by the people, for the people.” Tragically today America is of the one percent, for the one percent, by the one percent. Americans in the top one percent of earners make an average of $1.32 million per year.

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American way of living needs 4 Earths

Americans consume a disproportional amount of the world's stuff. It's obvious that Americans consume more, on average, than the people of less developed countries. But the claim that four Earths would be needed if everyone lived like Americans is still a striking one.

• America make up 5% of the global population.
• America uses 24% of the world's energy. 
• America eats 15% of the world's meat. 
• America produces 40% of the world's garbage.
• America eats 10 billion animals every year. 
• America throws out 16 billion disposable diapers every year. 

It would take 4 Earths, to be precise 3.9 Earths, to sustain world population of seven billion at American levels of consumption. At Indian consumption level, world requires just half the planet.

One curious thing to note is that the world's population is currently using not one, but one-and-a-half Earths. The forests and oceans of the world absorb a lot of carbon dioxide, but we are currently emitting more than the planet can handle and extra land and sea we would need to absorb it is estimated that we need an extra half a planet.

5% of the world's population that lives in the U.S. has more environmental impact than the 51% that live in the other five largest countries. The wealthiest 20% of the world's population consumes 80% of the goods and services produced from the earth's resources.

The global economy cannot grow indefinitely on a finite planet. As populations increase and economies expand, natural resources must be depleted; prices will rise, and humanity -- especially the poor and future generations at all income levels -- will suffer as a result.

Americans ought to realize that although we must satisfy basic needs, a good life is not the one devoted to amassing material possessions which eventually comes to own us, keeping us from fulfilling commitments that give meaning to life, such as those to family, friends, and faith.