Custom «Anti-Capitalism» Essay Paper Sample
American capitalism has been offered as a solution around the world since the 1960s. It is an economic system in which wealth and ways of producing wealth are privately owned and regulated as opposed to state-owned and controlled. Lands, labor and capital are owned, operated and traded by private individuals either singly or jointly (Marcus, 2008). In short, the investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. Based on the definition of capitalism, the current global financial crisis is certainly one of capitalism’s major and predictable crises which are produced in this case by inadequate capitalist self-regulation. Capitalism hasn’t gained much traction for a simple and obvious reason – it doesn’t work. It doesn’t offer any long-term solution for the market failures that takes place on a regular basis. It doesn’t offer stability and hope for the largest market failure we face today especially when there’s climate change in the market.
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The year 2008 marked the time when large institutions in the United States and Europe encountered a credit crisis and decline in economic activity dubbed as the global economic crisis. The crisis rapidly spread into a global economic shock leading to numerous European bank failures, declines in several stock indexes, immense reductions in the market values of equities and commodities. The credit crisis was worsened by Section 128 of the US emergency Economic Stabilization Act of 2008 which permitted the Federal Reserve to pay interest on excess reserve requirement balances held on deposit from banks, incentives were removed for banks to extend credit instead of placing cash on deposit with the Federal Reserve (Federal Reserve Governors Board, 2008).. In addition to, the deleveraging (reduce borrowings) of financial institutions further accelerated the liquidity crisis and resulted a decrease in international trade. The currency crisis developed at the end of October 2008 saw investors moving vast capital resources to stronger currencies like dollars, yen and the Swiss franc directing many emergent economies to seek support and aid from the International Monetary Fund (Landler, 2008).
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It is then determined that anti-capitalism movement is strengthened more than before most especially with the ongoing global financial crisis. As a capitalist party, US Republicans should have maintained independence from sectoral interest such as banks. There should have been more imposed regulations that could have avoided such major crisis. It is noted that drug company representatives appointed regulate drugs and oil company representatives laying down energy policy among so many other institutions imposing their own regulations. Self regulation unsurprisingly leads to short-sighted public policy melt-down. The socializing of capitalism losses left the profits in the pockets of the lucky rich.
We can’t help but compare American capitalism to the economic system of China. China and Russia are communist capitalism countries while democratic socialism is adapted by the United States, Europe, Japan, Australia and Canada. India, Africa and South America remain in the middle which can be fought over by both sides. Communist systems have been able to grow at the rate they are now because of globalism along with the American export policy for economic growth (O'Brien & Williams, 2004).
Some critics recognize the advantages of capitalism and suggest balancing capitalism with some form of social control through government regulation. The basis of the problem is the control of the money supply. A country has an instrument that basis its operation on whoever controls it in the case of the Bush administration. Capitalism sadly doesn’t exist since the departure form the gold. It is engineered in a way that is greatly inflationary and promoted enrichment those who already are wealthy. The excess of these activity resulted to the backlash we have today. When monetary value is created and established without real value and worth, the illusions of great riches lasts for a long time. People then realize that no strong foundation exist to extend the great monetary value to a greater length of time. Whatever system we use, capitalism needs some serious changes at its most basic level.
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Come to think of it, the democratic socialism has been implemented and has caused many wars and consequent destructions while communist capitalism caused lesser wars. Capitalism when incorporated with structural changes can mean a partial capitalism. Global issues can be partially or completely solved through a radical break from a capitalist society. Changes in the structure of capitalism and its self-regulatory private entities could have averted the global financial crisis. Talks of regulation are being advocated blaming self-regulatory institutions for shaking up today’s economic climate. The same belief in unchecked growth that enriched the economy on a nourishment of junk bonds and empty lending has slowed down the growth of the economy. Thus, thee same institutions would now agree to venture into “anti-capitalist” regulations. These proposed anti capitalism changes are described as more regulatory and managed rather than completely free or laissez faire capitalism to which critics of regulation have opted. The argument lies in a regulatory capitalist economy is different to a state-based command economy such as Soviet Union. The bottom line is that there are various forms of capitalism apart from the black and white capitalism and communism that can be considered. America has failed to manage risk and allocating capital. It must now face change in its regulatory structures instead of cries of bail out addressed to the government. Unfortunately, the worst element of the US financial system have been exported and felt by the rest of the world.