Capitalism Beyond The Current Economic Crisis
You must have read in the newspapers and heard from many on television- the end of capitalism is near because of the current economic crisis. Many fingers have been pointed at greed, short-sighted speculation, mismanaged financial markets and irrational investment. These have been cited as proof that it is the capitalism that has got us in the mess we are in.
To look deep into capitalism and the current economic crisis, we should realize that the capitalism is certainly not responsible for the present economic crisis. The year 2008 was an year of crises. Following the food crisis, which was particularly threatening to poor consumers, there came a record increase in oil prices. All oil-importing countries felt the pinch. The year ended with the global economic downturn, gathering speed at a frightening rate. The start of the year 2009 only intensified the downturn. A full-scale depression is feared by many economists. The first question that surges forth strongly is the nature of capitalism and whether it needs to be changed.
Defenders of unshackled capitalism who are against any change believe that capitalism is unnecessarily being targeted for short-term economic problems. The present economic scenario is attributed to bad governance and the greed of some individuals.
Whereas, on the other hand, many do feel the need to change capitalism and see truly serious defects in the existing economic arrangements. Looking for an alternative approach that is being called "new capitalism”, they are seeking for the reforms.
The question that arises now is that whether the nature of capitalism really needs to be changed. Long rejected theories from the Great Depression years of the 1930s are being rejuvenated. Its being argued that only far-sighted and wise government interventions and regulations can save us from the dismal economic scenario .But any attempt to severely regulate the market economy out of existence would only succeed in undermining the greatest engine of economic progress and prosperity known to mankind.
The capitalist system is a great engine of human prosperity. Besides creating the profit incentives for industry, it has literally pulled hundreds of millions of people out of poverty around the world.