By Shahab Sabahi
Energy and Environment - Policy analysis research group
The Telegraph Aug 9th 2011 Janet Daley posted a piece titled “If we are to survive the looming catastrophe, we need to face the truth”.
Her piece was quite lucid and attracted some 1700 readers who commented back. She expresses her idea that a capitalist economy cannot support a socialist welfare state. BUT it is not a fair conclusion whereas she built her argument based on this belief that existing CAPITALISM model, legacy of Reagan and Thatcher’s era, still works and is legitimate.
To get a reasonable perspective and insight, we should take a political economy view. In effect Capitalism in its old fashion and in global scale is not an effective model to fulfill needs of society and cannot provide security.
The existing capitalism went wrong when U.S. president Ronald Reagan and British Prime Minister Margaret Thatcher adopted and implemented the financial market deregulation policy some two decades ago. The 90s the financial market deregulation became synonymous with economic growth and prosperity in Asia which ended in the great Asia financial crisis in the late 90s. Asia wisely managed the crisis and started to regulate the currency exchange rate where P. Krugman and G. Soros did not advocate it for the west. It was thought that free market would turn to become a gateway to global socio-economic stability and economic growth. However, the economic collapse of 2008 - the result of that shortcoming in west-capitalism - shook the old fashion capitalism from its glorious and thought-perfect position.
In fact a social welfare USED to be a product of a regulated free market and a capitalism thought which faded away a decade ago.
Time passes and brings changes. Now it is time for western countries to look at the Neo-Capitalism which is practicing by Brazil, China and to some extend the Latin Americas such as society safety net (Chicago 2011, Francis Fukuyama). There is something can be learnt and incorporate into the old capitalism model in order to make it more functional. A new form of relationship between government, regulation, and the free market on a global scale must be conceptualized to live up society’s expectations.
Certainly this Neo - Capitalism can support a welfare state, Ms Janet Daley.
Energy and Environment - Policy analysis research group
The Telegraph Aug 9th 2011 Janet Daley posted a piece titled “If we are to survive the looming catastrophe, we need to face the truth”.
Her piece was quite lucid and attracted some 1700 readers who commented back. She expresses her idea that a capitalist economy cannot support a socialist welfare state. BUT it is not a fair conclusion whereas she built her argument based on this belief that existing CAPITALISM model, legacy of Reagan and Thatcher’s era, still works and is legitimate.
To get a reasonable perspective and insight, we should take a political economy view. In effect Capitalism in its old fashion and in global scale is not an effective model to fulfill needs of society and cannot provide security.
The existing capitalism went wrong when U.S. president Ronald Reagan and British Prime Minister Margaret Thatcher adopted and implemented the financial market deregulation policy some two decades ago. The 90s the financial market deregulation became synonymous with economic growth and prosperity in Asia which ended in the great Asia financial crisis in the late 90s. Asia wisely managed the crisis and started to regulate the currency exchange rate where P. Krugman and G. Soros did not advocate it for the west. It was thought that free market would turn to become a gateway to global socio-economic stability and economic growth. However, the economic collapse of 2008 - the result of that shortcoming in west-capitalism - shook the old fashion capitalism from its glorious and thought-perfect position.
In fact a social welfare USED to be a product of a regulated free market and a capitalism thought which faded away a decade ago.
Time passes and brings changes. Now it is time for western countries to look at the Neo-Capitalism which is practicing by Brazil, China and to some extend the Latin Americas such as society safety net (Chicago 2011, Francis Fukuyama). There is something can be learnt and incorporate into the old capitalism model in order to make it more functional. A new form of relationship between government, regulation, and the free market on a global scale must be conceptualized to live up society’s expectations.
Certainly this Neo - Capitalism can support a welfare state, Ms Janet Daley.
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