The author of the paper examines the economic theory of capitalism which is one of the most propagated theories which supports free trade, which has been dominant for most of the history of modern western civilization and ensures the sustenance of the world’s societies…
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It can be said that capitalism has had a huge impact on the sovereignty of the states, which have come to depend on it completely. It has, in fact, been said that it undermines state sovereignty because decisions that governments have to make have to put into consideration their impact on international affairs (Anderson 85). An example of this is oil-exporting countries, which heavily depend on the income from this product to fund their national budgets. Moreover, if these countries were to act in a way that displeases the international community, then they would be forced to abandon such decisions through the placing of sanctions on their exports by those countries, which import their oil (Hobson 64). Moreover, because of capitalism, many countries have economic interests in other countries. To protect these interests, it has become necessary for the power to meddle in the political affairs of the weaker ones. This has not only made the latter countries lose their sovereignty, but it has also encouraged their overdependence on more developed nations for economic aid. In many countries, it has been found that economic power is disproportionately balanced so that a few hold most of the wealth while the rest only hold very little or none at all (Lenin 18). This has created a situation where individuals own the majority of the resources in the society and this has made the gap between the rich and the poor to widen. The rich become richer while the poor have continued to become poorer as the cost of living increases while their income has remained the same. The economic policies of many countries tend to be left in the hands of politicians, who make decisions about things or places they are unacquainted with, lack of adequate information about the framework to design effective and correct policies and programs to facilitate the development of their people. This has led many nations to pursue policies that are detrimental to the equal development of all their citizens, as they have tended to secure the status quo; namely, the rich being favored at the expense of the poor, who make up the majority of many societies the world over (Schumpeter 105). The potential for social chaos because of this, as propagated by Marx, is quite possible especially when one considers that the trickle effect policies propagated by capitalists do not seem to work. It is a fact that economic inequality is a reality among the majority of the world’s population and this has come about mainly because of the fact that capitalist policies have become dominant. Despite this situation being rampant the world over, most of the people with the power to make a difference are either unwilling or unable to do so because they do not want to disturb the status quo as it is.
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The author asks the question if the large gap between poor and wealthy can destroy capitalism. He divides it into several parts: (1) if the gap between poor and wealthy destroys capitalism; (2) if democratic capitalism represents reliable system; (3) if the gap between rich and poor destroys democratic capitalism in Europe.
The resultant increase in economic activity has a ripple effect because it increases employment opportunities and reduces inflation.
The main cause of economic problems in the country is the amplitude of the
The bailouts paid to the banks were done at the cost of the living conditions of the people of various countries which are continuously going down and the government policies of the most leading economies of the world are only adding to the problems faced by public in the form of cuts to public spending and wages, reduced jobs and high inflation rates.
This essay primarily focuses on the issue of securing economic justice in a society. Economic justice is considered as a set of decent values for building an economic institution. It should be nondiscriminatory and allow individuals to interact freely with areas of business that suits them best. People should be compensated based on their efforts.
Thus the term 'free market' is significant in capitalism as it refers to an economic system that is free of external intervention and is guided by a rule of law that is focused on establishing and protecting private property, including, private ownership of the means of production (Levi-Faur et al, 2005).
According to the report the short term possibilities will include all input levels which are feasible based upon one restricting factor which is the time period and will be able to produce a particular level of output. This is represented as an isoquant which shows all the various input bundles that may be combined in order to produce one particular level of output.
The variables considered for the study include the natural logarithm of real per-capita consumption (LCJ), the natural logarithm of real per-capita income (LYJ), the real interest rate (RJ) and the rate of unemployment (UJ). In addition to these four variables, there included in the model is a dummy variable (D83).
north-south divide such that each nation gains equally from the cooperation though they are at different economic levels as seen in the study work of Breslin & Hook (2002). This form of regionalism aims at making attempts create mechanisms which are formal to deal with
(Becker 1965). Becker (1976) presented the three foundational assumptions of the economic approach as "maximizing behavior, market equilibrium, and stable preferences" (p. 5). In the preface to his work, A Treatise on the Family, Becker wrote: "The economic approach .
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