Capitalism dying ??

In an article in the Times of India, Swaminathan A Iyer has made an interesting list of writers of obituary of Capitalism and has shown that despite all the forebodings, Capitalism has survived so far and it has survived because of its inherent ability to re-engineer itself and also due to its character being, in a broader sense, that of a govt-private JV .
Here are some arguments in support of capitalism.
First on the self correcting nature of capitalism. As long as land, labor & capital are owned, operated and traded by private individuals/corporations which is what happens in capitalism, there exists a profit motive . It is this urge to make profits that breeds entrepreneurs who use their knowledge, skills and resources for economic activity. Economic freedom draws in more participants which leads to competition which further leads to better and more affordable goods and services thereby benefiting larger proportion of population. Thus capitalism promotes economic growth which is higher GDP. Benefit to people is in terms of improved living standard through greater availability of food, housing, clothing and health care. Understandably, this is what welfare – the dictum of socialism - is all about . The ingenuity of human entrepreneurship in fostering widespread economic activity cannot be replicated by state machinery which can be handicapped by lack of motive, resources and ability.
In a free economy it’s the demand supply equilibrium which works. Freedom has with it the excesses i.e. the booms and busts and these have been known to exist in cycles. In times of one or the other , demand and supply adjust to a state of equilibrium from where human greed and fear start taking over and the cycle repeats itself. But importantly in the process, learnings are adopted, earlier shortcomings corrected and the system goes on to improve itself .
Now, no state can ensure welfare of its people without a prospering economy. In that sense the state can create a climate for free economic activity i.e. where market forces can play . It can also be a part of that market force, albeit ensuring level playing field is not disturbed. Ultimately the state also benefits through tax collection. Thus in a capitalist state the government does have a role, as it must, in ensuring welfare . A socialist state on the other hand can attempt welfare but will lack the entrepreneurship to propel a flourishing economy. India is a fitting example of this. India’s progress is there for all to see. From Gold control order of the 60s to bludgeoning forex reserves , the impressive rise in per capita income, and the cellphones and two wheelers in the hands of millions are truly eye opening.
According to Nobel laureate Milton Friedman (1912 – 2006) , economic freedom of competitive capitalism is a requisite of political freedom and that centralized control of economic activity is always accompanied by political repression.
India’s policy makers would do well to continue with the reforms more vigorously and not get tempted to swing back to the old ways.