CAPITALISM AND THE NEED FOR A FIFTH FACTOR OF PRODUCTION!
Capitalism as an economic system is based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor. Capitalism is grounded in the concept of free enterprise, which argues that government intervention in the economy should be restricted and that a free market, based on supply and demand, will ultimately maximize consumer welfare.
These principles were most notably articulated in Adam Smith's treatise, The Wealth of Nations (1776), in which he opposed the prevailing theory of mercantilism. Capitalism has existed in a limited form in the economies of all civilizations, but its modern importance dates at least from the industrial revolution that began in the 18th century, when bankers, merchants, and industrialists–the bourgeoisie began to displace landowners in political, economic, and social importance, particularly in Great Britain.
Capitalism stresses freedom of individual economic enterprise; however, government action has been and is required to curb its abuses,which have ranged from slavery to monopoly cartels and financial fraud.
Despite the many successes recorded through this form of economic system which has come to dominate the world economic order, yet it has been plagued with one economic turmoil or the other starting with the great depression of the 30's, the imbalances in the world economic order which led to the various classification of the economies of the countries of the world from developed to developing and underdeveloped etc. The imbalances (or income disparity ) occassioned by unequal income distribution - leading to the classification of the poor, middle income, and the elite etc. these and more are some of the factors which have enabled critics of the capitalist system to gain grounds in arguments on the world economic systems.
Further more, critics of capitalism has argued that the system need to be reviewed as it seem to be outdated - hence does not absorb the dynamism in society which has made human capital as the driving force of economies but still emphasizes on capital as the force.
One of those with such opinion was Klaus Schwab, founder of the World Economic Forum, who is in no doubt that capitalism is "outdated," and that talent, not capital, should be the main driver of economies.
In my opinion the problems of capitalism are 'fundamental' in nature, in fact they stemmed from faulty foundations which includes: (i) The emphasis on capital (2) The reliance on the four factors of production - Land, Labour, Capital and Entrepreneur without a 'balancing fifth factor' (THE INTEGRITY FACTOR).
As was postulated by the late Professor of Development Economics (Emmanuel Nwosu) of Imo state university, Nigeria, there is need to insert Integrity as the fifth factor of production, in order to guide the last factor - the entrepreneur. In propounding the Integrity theory, the late professor of economics Mr. Emmanuel Nwosu, stated that the absence of the integrity factor manifests most in public administration or governance, where corruption is most likely to take a centre stage.
After a scrupulous analysis of developing economies of the world, i've come to agree that the problem of development goes beyond the four factors of production which comprises of land, labour, capital and entrepreneur. Hence there is need to to insert a fifth (abstract) factor which the entrepreneur as the sole manager of other factors must possess.
My argument is that when an entrepreneur fails to perform credibly with the three other factors, then his claim of possessing the fifth factor-Integrity must be questioned. Unless in situations where there are external disruptive factors such as conflicts and sanctions.
Taking a case study of some countries where corruption is on the high side (including our country Nigeria) there is no gainsaying the fact that corruption is the major reason for the slow growth rate and high poverty rate in these countries – a major indicator of absence of the integrity factor. i also dicovered that in these countries, the crime rate is high as well as poverty level, while their life expectancy is low. And their justice systems are the most sluggish and unfair in the world.
I also observed that most of these countries are abundantly blessed with natural resources which should have transformed their economic landscape positively but what they have is the reverse, due to lack of the integrity factor in their management and leadership leading to looting of public funds and other abuses of positions of authority.
To make the application of this factor unambiguous, i am of the opinion that the integrity factor should be embedded into the national psyche and conscience of every individual in the world, and not just in the affected countries. in fact ‘Integrity Studies’ should be inserted into school's curricular through out the whole world.
www.google.comwww.brunoemekaonuoha.blogspot.com
Considering the facts that critics will try to puncture my arguments for this Fifth factor, i took a critical analysis of Integrity as a factor of production in respect to the challenges faced by Capitalist economies and came to these conclusions:
1. The fact that integrity is an abstract value makes it difficult to measure and so, one cannot measure how much integrity a leader or entrepreneur possesses.
2. Most of the factors that make a person to be dishonest or lacking in integrity factor are external and sometimes out of his control – thus very influential.
3.That the societies as a whole has major roles to play in upholding this fifth factor.
4. If integrity is inserted as a fifth factor, and adopted by economist and leaders all over the world, there will be rapid development, as well as reduction in conflicts all over the world - as integrity questions your behaviours towards your fellow human beings.
Finally, as an economist, I am of the view that though integrity is an abstract value, it should be placed as a fifth factor of production. So that leaders or entrepreneurs who fails in their areas of calling will fall back and look at how much integrity they possessed - That is if they possesed any at all!
Capitalism as an economic system is based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor. Capitalism is grounded in the concept of free enterprise, which argues that government intervention in the economy should be restricted and that a free market, based on supply and demand, will ultimately maximize consumer welfare.
These principles were most notably articulated in Adam Smith's treatise, The Wealth of Nations (1776), in which he opposed the prevailing theory of mercantilism. Capitalism has existed in a limited form in the economies of all civilizations, but its modern importance dates at least from the industrial revolution that began in the 18th century, when bankers, merchants, and industrialists–the bourgeoisie began to displace landowners in political, economic, and social importance, particularly in Great Britain.
Capitalism stresses freedom of individual economic enterprise; however, government action has been and is required to curb its abuses,which have ranged from slavery to monopoly cartels and financial fraud.
Despite the many successes recorded through this form of economic system which has come to dominate the world economic order, yet it has been plagued with one economic turmoil or the other starting with the great depression of the 30's, the imbalances in the world economic order which led to the various classification of the economies of the countries of the world from developed to developing and underdeveloped etc. The imbalances (or income disparity ) occassioned by unequal income distribution - leading to the classification of the poor, middle income, and the elite etc. these and more are some of the factors which have enabled critics of the capitalist system to gain grounds in arguments on the world economic systems.
Further more, critics of capitalism has argued that the system need to be reviewed as it seem to be outdated - hence does not absorb the dynamism in society which has made human capital as the driving force of economies but still emphasizes on capital as the force.
One of those with such opinion was Klaus Schwab, founder of the World Economic Forum, who is in no doubt that capitalism is "outdated," and that talent, not capital, should be the main driver of economies.
In my opinion the problems of capitalism are 'fundamental' in nature, in fact they stemmed from faulty foundations which includes: (i) The emphasis on capital (2) The reliance on the four factors of production - Land, Labour, Capital and Entrepreneur without a 'balancing fifth factor' (THE INTEGRITY FACTOR).
As was postulated by the late Professor of Development Economics (Emmanuel Nwosu) of Imo state university, Nigeria, there is need to insert Integrity as the fifth factor of production, in order to guide the last factor - the entrepreneur. In propounding the Integrity theory, the late professor of economics Mr. Emmanuel Nwosu, stated that the absence of the integrity factor manifests most in public administration or governance, where corruption is most likely to take a centre stage.
After a scrupulous analysis of developing economies of the world, i've come to agree that the problem of development goes beyond the four factors of production which comprises of land, labour, capital and entrepreneur. Hence there is need to to insert a fifth (abstract) factor which the entrepreneur as the sole manager of other factors must possess.
My argument is that when an entrepreneur fails to perform credibly with the three other factors, then his claim of possessing the fifth factor-Integrity must be questioned. Unless in situations where there are external disruptive factors such as conflicts and sanctions.
Taking a case study of some countries where corruption is on the high side (including our country Nigeria) there is no gainsaying the fact that corruption is the major reason for the slow growth rate and high poverty rate in these countries – a major indicator of absence of the integrity factor. i also dicovered that in these countries, the crime rate is high as well as poverty level, while their life expectancy is low. And their justice systems are the most sluggish and unfair in the world.
I also observed that most of these countries are abundantly blessed with natural resources which should have transformed their economic landscape positively but what they have is the reverse, due to lack of the integrity factor in their management and leadership leading to looting of public funds and other abuses of positions of authority.
To make the application of this factor unambiguous, i am of the opinion that the integrity factor should be embedded into the national psyche and conscience of every individual in the world, and not just in the affected countries. in fact ‘Integrity Studies’ should be inserted into school's curricular through out the whole world.
www.google.comwww.brunoemekaonuoha.blogspot.com
Considering the facts that critics will try to puncture my arguments for this Fifth factor, i took a critical analysis of Integrity as a factor of production in respect to the challenges faced by Capitalist economies and came to these conclusions:
1. The fact that integrity is an abstract value makes it difficult to measure and so, one cannot measure how much integrity a leader or entrepreneur possesses.
2. Most of the factors that make a person to be dishonest or lacking in integrity factor are external and sometimes out of his control – thus very influential.
3.That the societies as a whole has major roles to play in upholding this fifth factor.
4. If integrity is inserted as a fifth factor, and adopted by economist and leaders all over the world, there will be rapid development, as well as reduction in conflicts all over the world - as integrity questions your behaviours towards your fellow human beings.
Finally, as an economist, I am of the view that though integrity is an abstract value, it should be placed as a fifth factor of production. So that leaders or entrepreneurs who fails in their areas of calling will fall back and look at how much integrity they possessed - That is if they possesed any at all!
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