Crisis of capitalism

 

INTRODUCTION

Acording to Allen, (1981). Explain Capitalist is a person who uses their wealth to invest in trade and Industry for profit in accordance with the principles of capitalism.

Sheikh (1978) describe Crisis of capitalism; The word crisis used in reference to the economic system, may be with connection with a Conjuncture crisis, the Cyclical or Business cycle or The historical crisis of capitalism.

A conjunctural crisis can be discussed with connection with the specific conditions involved in the given case, and generalization is impossible. For example such crises can be caused by defeat in war or by being overtaken economically by a rival power or as a result of a weak or incompetent government such as where the environment has been destroyed by industry.

Crisis of capitalism cyclical; The cyclical crisis of capitalism or business cycle, is the oscillation between boom and slump, between inflation and recession, which runs through the capitalist economy roughly every ten years. The business cycle arises from the distance that opens up between the production and the consumption of a commodity bridged by debt and the huge mass of fictitious capital which builds up on the basis of credit system.

Crisis of capitalism historic; The historic crisis of capitalism is the tendency, played out over decades and centuries for life under capitalism to become more and more untenable, and for the social forces opposing capitalism to gradually build up. One of the central concerns of Marx in his study of the capitalist mode of production was to identify and understand its inner contradictions, the source of historic crisis which would eventually create conditions for its overthrow and replacement by a more humane and rational system of production.

Capitalism an economic and political system in which a country's trade and Industry are controlled by private owners for profit rather than by the state. It describes capitalist crisis in different kinds as the word crisis divided into three parts Conjunctural crisis, Business crisis and Historic crisis, the result of all of this was termed as recession by the government, it was a large scale depression of virtually every industry and the whole economic system. The main body of this essay it's explain  about the factors that led to the occurrence of capitalist crisis since 1973. Hence conclusion trying to describing other crisis since 1990 up to 2018

Smith et al (2006) identity the factors for capitalist crisis since 1973. As follows,

Oil crisis; Began in October 1973 when the members of Organization of Arab Petroleum Exporting Countries, Proclaimed and oil embargo. The embargo was targeted at nations perceived as supporting Israel during Yom Kippur War. The initial nations targeted were canada, Japan, United kingdom and the United states. The embargo caused an oil crisis by the end of it in March 1974, the price of oil had risen, it was called the first oil shock.

Marx (1981). 1973-74 Stock Market Crash; as the first discrete event since the Great depression to have persistent effect on the U.S economy. The embargo had a negative influence on the U.S economy by causing immediate demand to address the threats to U.S energy security on an international level, the price increases changed competitive positions in many industries such as automobiles. Macroeconomic problems consisted of both inflationary and deflationary impacts. The embargo left oil companies searching for new ways to increase oil supplies.

1974-75 Excessive debt emerged; Neo-liberal policies despite their emphasis on sound money and balanced budgets, have not overcome the problem of excessive debt. Which after the slump the world debt mountain both private and government rising rapidly and will sooner or later collapse under its own weight. Much of investment in emerging markets in shares, company, bonds privatization has been financed on the basis of loans. By mid 1975 they had fallen to four cents on the dollar. In other words the capitalists overall rate profit declined 33% in two years the sharpest drop since world war two.

The 1979 second Oil shock and Neo-liberalism; occured in the world due to decreased oil output in the wake of the Iranian Revolution. Despite the fact that global oil supply decreased by only 4% widespread panic resulted driving the price far higher.whereas neoliberalism form free market market policies include privatization of state industries, deregulation of markets and business activity and the undermining of work place right and organization to establish labour flexibility. This liberated big business from its keymedian felters,full employment strong Workers, hingh social spending based on high taxation. The invisible hand of free market force it was claimed, would regulate economic activities for better than governments however, neo-liberal policies were forced through by capitalist governments using economic and state coercion. The capitalist turned to neoliberalism after the high inflation of 1974-1979.

Robert (2004). Decline of OPEC in 1981;OPEC soon lost its preeminent position, its production was surpassed by that of other Countries. Additionally its own member nations were divided. Saudi Arabia, trying to recover market share, increased production, pushing prices down, shrinking or eliminating profit for high cost producers. The division within OPEC made concerted action more difficult. Hence has never approached its earlier dominance.

Kuiken (2005). Financial instability since the 1987 crash;There has been continuous volatility but the acute instability of globalised financial markets is accelerating and will, at a certain stage, provake a major crash in the last three or four years the volume and volatility of world capitalist flows has increased enormously. Hence submerging markets in Eastern Europe, Asia and Latin America has dramatically increased volatility.

CONCLUSION

However capitalist crisis passed through various duration but also since 1990 up 2018 termed as current crisis, whereas since 1990 Iraq's invasion of Kuwait upset the market. September 2003 the inflation adjusted price of a barrel of crude oil to August 2005, then 2006 conflict between Israel and Lebanon. 2008 financial crisis resulted in worst global recession since the Second World War. 2011 Libya civil war, 2014 -2015 the world market was again steadily oversupplied 2016 US production increased dramatically and United states went on to become the largest oil producer at 2018.

 

 

 

 

 

 

REFERENCES

Allen, et all (1981). World in Recession: capitalist offensive and working class .Junius

Karl Marx (1981). Capital: A Critique of Plitical Economy.

Kuiken, J (2005). Striking the Balance: Intervention

Shaikh, A (1978). An introduction to the History of Crisis Theories in U.S capitalism in Crisis: URPE, New York.

Smith, D.(2006). Palestine and the Arab- Israel Conflict: New York.

Robert, P (2094).The End of Oil:The Decline of Petroleum Economy and the Rise of a New Energy Order. New York: Houghton Mifflin Company.