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  1. 1. Capitalism and local development moral and ethical issues
  2. 2. Capitalism • It is a social system that exists in all countries of world. It is based on the private ownership of capital and production inputs and on the production of goods and services. The essential feature of capitalism is the class division. • This means that under this system we have a group of people who own means for production and distributing goods ( capitalist class) and group of ppl who must sell their abillity to work in return for a wage ( working class) ( source : Investopedia)
  3. 3. Capitalism must consider moral and ethical issues In this form as it is now capitalism creates more inequalities in society. 1. Developing countries can’t follow developed countries in this profit-oriented race. As a result of that we are witnessing higher poverty rates and social inequality in the world. 2. Local and national culture does not have any space left for unique development 3. The profit motive Its emphasis on consumption leads to unfair market competition and since capitalists need to make profit as a condition for not losing their investment, they can’t afford themselves to invest in environment. Developing countries are the victims of this way of working and producing since foreign capitalists are only using cheap workforce to produce goods. New private investors didn't contribute to the fall of poverty rate , in fact the poverty rate had rose since the 90s. Those profit oriented investors don’t reinvest their profite in production in Bosnia but they take money out of sytem and they also caused many environmental problems 4. Wrong policy measures In order to attract more capitalists in their business zones, policymakers at local and regional level make business plans that don’t include protection of environment and workforce. In Bosnia and Herzegovina you will see SWOT analyses done by local government where as a strength of their community they emphasized “cheap” work force. 5 Exploitation of natural resources and workforce in developing countries 6 Small businesses and family farms are disappearing,
  4. 4. Capitalism in this form leads to • Overwork • Poverty • Debt • Racism and as a result we have • Religion fundamentalism • Ethnic nationalism • Backlash racism The purpose of capitalism is self-expansion and it does so by monetizing social value and human labour.
  5. 5. It is widely assumed that capitalism means free market but we have different models of economy. Solidarity based economy • Chilean sociologist Luis Razeto Migliaro is often credited with coining the expression “solidarity economy” in the 1980s. • boomed in 1990s when Latin America was facing an economic crises. • people started to look for alternative income sources and they began to cluster into groups and associations. • Brazil is being hailed as an international model of social development based on principles of solidarity economy
  6. 6. Solidarity based economy has different meanings in different countries. In Brazil they emphasize cooperatives while in francophone Europe it is connected with the “social economy” and their associations. This model may be influenced by the long history or traditional economic practices and current situation which allows this model to create a sustainable growth for particular country, Principles: • Self-management • Democratization of the economic relations • Co-operation instead of forced competition • Valuing diversity. Human beings are more important than profits • Valuing local knowledge, constant learning and training • Social justice and emancipation • Protection of the environment (Source: National Secretariat of Solidarity Economy, Brazil) Some manifestations of this model: • Community development Banks • Eco-villages • Local currencies • Community groups organized to confront some needs Solidarity based economy
  7. 7. Positive • Encourage processes of building diverse locally-rotted and globaly-connected economies • Creates cultural and social benefits which contribute to the development of whole society • Open process which is not influenced by any political party • Return values of workers environment stolen by this current form of capitalism • Explore new ways of reducing social inequality • There are no government incentives and support for creationg local groups • Access to credit is limited • Consumer awareness is still low Challenges
  8. 8. Capitalism and anxiety Set of moral and social values : • Entrepreneurialism • Growth • Productivity • Individualism and only individualism Result : • Anxiety • Depression • Overworked • Workplace stress • Suicides
  9. 9. Capitalism and anxiety Personally I think that this effect of capitalism on human behaviour is one of main drivers of high rates of unemployment. A huge presrure is being putted on youth to be more productive and employable as well as entrepreneurial . These are values of modern society. Because of that everyone will rather choose to work as a stock broker in London City even though he/she is educated to be an engineer. We have more freedom than ever but actually we are not free. We can’t be what we want or do what we like especially if we live in developing countries because of the challenges that capitalism is fostering.If you want to survive nowadays you have to work harder and faster just to accumulate more profit.
  10. 10. • Bosnia and Herzegovina (BiH) is just one of many developing countries ,facing problems of poverty and huge inequality. • Unemployment rate 44.54 percent • Euromonitor International forecast : by 2030. BiH will have been on the top of the list of the oldest countries ( 10.) • 20% of population live in capital city Sarajevo • Rural places and small communities are disappearing • Capitalims in this form can’t help BiH. Instead of implementing a simple strategy- sell everything to investors ,BiH must implement new strategies with focus on moral values and social capital within its local and rural communities. Bosnia and Herzegovina
  11. 11. What government in BiH can do • Institutional support for small enterprises • Reduction of barriers to local groups growth • Help build civic infrastructure by decentralizing programs • Increase investment in rural regions and non-formal education • Encourage real social dialogue through formal activities and implementing strategies • solidarity economy as an integral part of strategies to develop the labour market • Policies that promote local development
  12. 12. Example of solidarity based capitalism Region : Žepče municipality ( 30 000 inhabitants)  Željezno polje rural community ( 5 500 inhabitants) • Producers in that region gathered and formed the Raspberries Growers Association • The association has 250 members and they also cover the region outside their area.They are sellling their products not only in Bosnia but as well in rest of the Europe. They create work and generate income for nearly 5000 inhabitants in that province. First production was done in 2002 together with the company from Sarajevo and later they signed few contracts with foreign companies. • Now their profit reaches more than 3 million per year
  13. 13. Beside selling their products they also: • help younger producers in their region through workshops • implement social projects which aim is to improve the quality of life in their community, • fighting against social inequality by helping returned migrants • Implement process and use machinery which doesn’t have bad effect on environment • Invest in organic products from local growers and cooperants , • Promoting local development They didn’t look for money outside their community instead they have found a real strength and real values from “inside”. This is why capitalism must consider moral and ethical values and why only int his way local development can be sustainable ; use own resources and strengths through connection and solidarity , seeking for investments but also reinvetsing in own community.
  14. 14. • At the end I am not saying that capitalism should be deleted. Capitalism helped many countries in their growth, encouraged people to be creative and to train their Capitalism brought new ideas, motivated us to be better and to really use skills which they maybe never knew they had. • Nowadays , though, capitalism must also adjust and implement “human”elements into its system otherwise it will make same mistakes as other systems before. • Economy is not anymore a mere supply-demand graph and people are not rational beings who only think about accumulating their wealth. • We need to rebuild our society on moral and ethical values such as solidarity,equality and empowerment together with individuality.