Are We Seeing Capitalism Shift to the Left?
- besociety
- Feb 13
- 4 min read
Since the industrial revolution the world (for the most part) has taken on a capitalist mind set. Governments should be there to provide support to people, but businesses should be the drivers of economic value and innovation. the industrial revolution proved this as the freedoms that companies were given allowed them to create incredible things such as the car, early-stage plastic and help connect the world through globalisation. In turn the taxes they generated helped governments to raise living standards, increase life expectancy and build local infrastructure. However, this very basic formula has been tweaked and changed since its inception with some arguing that government should be involved in markets and others saying that the Government should be the entire market. Some of these points have been proved to be effective, without government involvement in the 2008 financial crisis the economy would have been in worse shape for a longer period, aids in this crisis included government bailouts and job programs to help the newly unemployed. Again 1987 after Black Monday the British Government who had just privatised BP issued a buy back for investors if the Stock hit a certain level. Both of these examples show how government stepping in can help the consumer and protect the economy without excessive overreach or control in the market. Today though in the world’s biggest economies are seeing a dramatic shift from the right-wing capitalist economic plan to a more socialist and left-leaning approach. China, the worlds second biggest economy has several SEO’s, and the newly elected Mayor of New York has vowed to bring in regulation such as government owned shops. Is this a sign that we are moving away from a free market, if so what is the future of capitalism?
China the world’s second largest economy took a change in its economic policy in the late 70’s under Xiaoping. It turned away from Mao Zedong’s pure Communist regime and installed several reforms that embraced aspects of capitalism and allowed for certain areas of the country to receive FDI. The 80’s really provided a space for reformation as the government started to explore the idea of State Owned Enterprises being allowed to keep some of there profits. As well as this the government was strong armed into allowing for the creation of some businesses after millions of people who were sent to work in the countryside under Mao came back home and couldn’t get a job. This Led to them opening up local shops in the cities. This was the start for China as they slowly made there economy more open and capitalist. Paired with a rapidly rising population growth in the 80’s and 90’s the Chinese economy was set to be a promising challenger to knock the US off the top spot. Fast forward to today and China’s markets are still open, but some areas of industry are partly owned by the government. These are the ‘strategic’ sectors including energy and banking for example 34% of the Chinese Industrial and Commercial Bank of China is state owned. But how does this show a shift in capitalism? This shows a shift as almost all of these state-owned companies are in debt and being propped up by the Chinese Government. Although the Chinese government embraced markets in the 90’s they are still holding out that government backed companies are a key force in economics. Even though businesses from different countries in the same sectors have increased their profit margins the Chinese Governments inability to embrace free markets and let some companies die lead them to skew capitalism away from its original idea of opportunity for the best business and instead to a system of inefficiency.
In the cradle of capitalism there also seems to be a shift in Government involvement. This time on the street level. NYC has just elected its new mayor, Zohran Mamdani. The democrat ran a socialist campaign calling for regulation to keep prices down for the consumer and make living in NYC cheaper as a whole. On the surface, a very mundane and predictable platform but the details of the anti-market aspects of his campaign creep to the surface. One key policy that Mamdani wants to install in NYC is State-Owned Shops, one for each borough. This plan has been widely criticised as it’s direct government involvement in the market. Mamdani’s plan has not fully been released yet but its highly likely that the shops will run at a no-profit level as the current profit margins for shops in NYC is between 1% and 3%. A no-profit model would allow the government to undercut competitors. Although lower prices are a good thing when it comes from the government it pushes private entities out of the market as customers flock to the cheaper alternative, this reduction in competition in extreme cases could lead to a monopoly markets as the government is the only one selling to the customers. As Mamdani plan has these shops running at a deficit it can also discourage competition from entering the market too, which could increase the price of goods at privately owned shops as the number of them decreases. This shift towards government involvement within markets in NYC is similar to that of the early days of China opening up its markets to the rest of the world, however as its coming from a place where free markets have been embraced for decades it may not take as well. Transforming a planned economy, where the government has a lot of control into a free-market economy shows economic opportunity whereas in NYC the state interacting in the market may cut the opportunity for businesses owners.
In conclusion, there has been a great change in the way our capital based economic systems works. A shift towards freedom in China where the government still maintains aspects of the economy has led to inefficiency and poorly run government businesses, and in NYC in an attempt to make living easier for its residents the newly elected Mayor has plans to bring in state owned shops. Straying away from the original idea of capitalism and free markets to a more left leaning socialist perspective.
Written by - Paul Anderson
Position - President
Date - 02/02/2026
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