Contemporary Theories of Political Economy - Essay Example

The Second World War had a great impact on almost all the world economies as it led to greater spending and a need for more and more arms and ammunition. All of this led to the building of more and more industries, which made countries around the world tap and realise their industrial potential. The 1950s and 60s were a time when most economies began to understand the true power that they possessed in terms of both physical as well as mineral resources. This World War was termed as the age of anxiety – when people were running helter-skelter for their lives and wishing for their sons, husbands, and fathers to return from the war scene, as well as families growing and prospering in terms of consumer spending because of the incessant revelation of the need and desire for more and more things.

Prior to the war, the country had thus been witnessing a boom in the economic sphere; this was because of the introduction of machines, tools and all kinds of equipments which were helping the primary, secondary as well as the tertiary sector of the economy to grow and develop. A number of changes were being brought into the economy as more and more women began working which helped labour and knowledge go hand in hand and get nurtured. Scientists began finding ways to implement their thoughts in terms of inventions and discoveries and with the help of machines, everything had become possible and people were beginning to realise that it was possible to achieve the American dream by just having access to some purchasing power and being able to spend money.

However, it is only natural that every economic demand and supply structure can never remain a constant because the needs and wants of the people or the consumers change with time. Thus, the American economy too, began to witness a decline in the profits around the year 1968. Post the Second World War, profits related to industrialization began to see a close not only in America, but also in various parts of the world, because of the impact that the American economy had had on the various world economies.

Various steps were taken in order to help the economy boost and find constancy in its establishment. For example, President Roosevelt’s ‘New Deal’ program helped to establish Keynesian economics within the American economy and stabilise it with respect to understand demand and supply of the consumers. However, since profits from industries and firms kept on decreasing, something had to be done in order to make changes and not let the economy decline to an extent that it would fall into a depression and not be able to recover from the depths of the same.

In the year 1972 the then President, Richard Nixon, even took the dramatic step of pulling the American dollar off the Gold Standard; this was considered to be a very pragmatic step taken in order to move towards a fiat currency system which had been started in the 1910s. Back in the year 1933, President Roosev