By Shahab Sabahi
Energy and Environment - Policy analysis research group
BBC program, Dateline London on August 7, 2011, made a short debate on global financial crisis. One of the program’s guests went in his way to question capitalism’s ability for solving the crisis. Although his argument contained rather the elements of emotions than critical reasons, it recalled me one of my fundamental question in our current research work. Is the Capitalism framework powerful enough to provide guide for globalization OR must an alternative be sought?
The recent US credit downgrade was the second wakeup call for political economists to profoundly review and adjust the capitalism theory in a way to address our today’s globalize economic problems. Yet, admin of one of the worst financial crises ever, policymakers, both side of Atlantic continue to adopt failed policies and weak strategies based on the obsolete capitalism theory that threaten to curtail recovery efforts. Furthermore keep on this way, pushes policymakers to grow more solid in their ideology and irrationality that will result in dogmatism. Joseph Stiglitz, in his book “Free Markets and the Sinking of the Global Economy”, considered the western capitalism – are bound for economic failure if they choose to undertake “another costly experiment with ideas that have failed repeatedly.”
Inevitably globalization has caused a shift in economic activity and increased per capita GDP across the world. Yet measuring poverty remains one of the most contentious issues. Poverty and the recent financial crisis pose the most challenging question to the capability of the capitalism theory to guide an integrated global economy.
Capitalism fails to address the externality of the emission of greenhouse gases, the loss of domestic jobs and the leakage of energy and labor intensive industries of the developed countries to developing countries. Capitalism is short to guide any formulations, regulations and legislations that are undifferentiated across the globe.
A powerful ideology is needed. Western-style deregulated capitalism brought greater material well-being only to riches (Shell, BP, Exxon, Apple, etc have made profit since the early 2011). Indeed, with this ideology over the course of last thirty- year average Americans income declined (my earlier post on August 2, 2011).
I strongly believe that the way out of this financial crisis rests on
1. greater equality,
2. stronger regulation,
3. a better balance between the market and government.
As we recently saw, a rigid ideological friction and special interests in the US house and the white house detoured the US traditional path of decision (a pragmatism and realistic ground to super dogmatism).
These ridiculous decisions will likely occur again, unless a fresh capitalism ideology is outlined.
Energy and Environment - Policy analysis research group
BBC program, Dateline London on August 7, 2011, made a short debate on global financial crisis. One of the program’s guests went in his way to question capitalism’s ability for solving the crisis. Although his argument contained rather the elements of emotions than critical reasons, it recalled me one of my fundamental question in our current research work. Is the Capitalism framework powerful enough to provide guide for globalization OR must an alternative be sought?
The recent US credit downgrade was the second wakeup call for political economists to profoundly review and adjust the capitalism theory in a way to address our today’s globalize economic problems. Yet, admin of one of the worst financial crises ever, policymakers, both side of Atlantic continue to adopt failed policies and weak strategies based on the obsolete capitalism theory that threaten to curtail recovery efforts. Furthermore keep on this way, pushes policymakers to grow more solid in their ideology and irrationality that will result in dogmatism. Joseph Stiglitz, in his book “Free Markets and the Sinking of the Global Economy”, considered the western capitalism – are bound for economic failure if they choose to undertake “another costly experiment with ideas that have failed repeatedly.”
Inevitably globalization has caused a shift in economic activity and increased per capita GDP across the world. Yet measuring poverty remains one of the most contentious issues. Poverty and the recent financial crisis pose the most challenging question to the capability of the capitalism theory to guide an integrated global economy.
Capitalism fails to address the externality of the emission of greenhouse gases, the loss of domestic jobs and the leakage of energy and labor intensive industries of the developed countries to developing countries. Capitalism is short to guide any formulations, regulations and legislations that are undifferentiated across the globe.
A powerful ideology is needed. Western-style deregulated capitalism brought greater material well-being only to riches (Shell, BP, Exxon, Apple, etc have made profit since the early 2011). Indeed, with this ideology over the course of last thirty- year average Americans income declined (my earlier post on August 2, 2011).
I strongly believe that the way out of this financial crisis rests on
1. greater equality,
2. stronger regulation,
3. a better balance between the market and government.
As we recently saw, a rigid ideological friction and special interests in the US house and the white house detoured the US traditional path of decision (a pragmatism and realistic ground to super dogmatism).
These ridiculous decisions will likely occur again, unless a fresh capitalism ideology is outlined.
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