Free Essay

Neoliberalism and the Global Financial Crisis

In: Social Issues

Submitted By SyedTajammul
Words 3663
Pages 15
Neoliberalism and the global financial Crisis

Introduction
The fusion of neoliberal beliefs and the western society started in the early 1970’s, it has incorporated in the society to such an extent that it can be portrayed as being impending. For more than forty years now neoliberalism has controlled governments, technology, housing and financial sector and has impacted our society in destructive ways. Neoliberalism reached a new height after the 2008 financial crisis leaving recession as an aftermath. Neoliberalism as explained by Harvey (2005) is a model of private enterprise which concentrates on the economy and its deregulation to empower a free market based monetary framework. Hillyard and Tombs (2004) see neoliberalism as a destruction breeding form of capitalism which they think makes a commanding dispute for, the state demanding to be considered in charge of methodically creating destruction.
Neoliberalism as indicated by David Harvey is a "hypothesis of political monetary works on recommending that human prosperity can best be progressed by the augmentation of entrepreneurial opportunities inside of an institutional system portrayed by private property rights, individual freedom, unhampered markets, and free trade" (2005:2).
The idea of neoliberalism in western social orders is connected with the Thatcher government in the UK and the Reagan government in the US which came to power in the late 1970s – mid 1980s henceforth presenting neoliberalism as a key financial guideline inside of free enterprise (Harvey, 2005). After World War II and ‘The Great Depression’, it was very clear that to stop the society from falling towards capitalism and being under threat, peace and stability was to be ensured and for that an equal balance of the market, the state and the democratic establishments was needed. However, combing these things together means a shift in neoliberal policies; however markets could not develop themselves and a sense of inflation occurred. Control of these markets was slipping from the hands of the elites, stating that first they needed to secure themselves which destroyed the shots of more power and control inside of the state and rather prompted privatization while the distinction between social classes became more extensive.
The Global Financial Crisis
The foundations of the 2008 crisis shoot from a monetary history connected with neoliberalism and the initiation of the free market. Since the start of the GFC, what has been scholarly by the nations around the globe and the organizations about the way of the emergency and how to deal with the arrangements for a superior result? In the stir of the crisis, ongoing problems of the Eurozone, slow and insubstantial growth in the US and a slowdown of developing countries, governments around the globe have been studying the risks to protect economies against the systematic failure of banking and insurance systems.
The GFC attracted thoughtfulness regarding market instability, to thump on impacts of "too big to fail" substances, the threats of large amounts of debt and the dangers connected with the massive development and expansiveness of the financial division opposite the real beneficial economy. All of a sudden the part of the state and other additional state offices are back on the arrangement motivation as governments investigate the extent of new administrative instruments intended to rebuild banks, present new capital reserve levels and protect professional guidelines. More prominent thought has been given to the dangers that the financial sector pose to the economy as a whole, and European governments specifically have tried to manage these issues by seeking after austerity measures intended to cut levels of unsustainable public debt.
The deliberate breakdown of worldwide financial organizations is to some extent a consequence of various interrelated issues that demonstrate the numerous measurements of the crisis of finance capitalism and the exhaustion of the neoliberal model of development: * The disappointment, and consequent recapitalization, nationalization or bailout of real banks prompting a period of "austerity politics" in Europe; * The development of unsustainable sovereign and national debt levels bringing about sequestration and quantitative facilitating policies in the United States; * The extensive development of the world derivatives market and resulting over-extension of national banking frameworks in connection to the "productive economy"; * The endeavored regulation of tax avoidance procedures by multinational organizations; * The tax avoidance by the elites in an arrangement of global expense shelters and trusts; * The over the top rewards and favorable shares given to CEOs even notwithstanding poor execution; * The active development of new data innovations that creates another worldwide multifaceted nature of high-frequency trading (HFT) at a speed that evades national and provincial organizations to successfully track or manage; * The way that the EU (acting with the CEB and IMF) has practiced significant financial and monetary weight on democratically chosen governments to change policies; * The deceitful and criminal society at the largest levels of the financial business including the careful control of the Labor exchange rate, with few of criminal convictions aside from Ponzi-schemers and insider-brokers. * The deterioration of trust and misalignment of motivations at the very heart of the monetary culture of equity markets;
The new right raised a fundamentalist point of view of organizations that came to be insinuated as monetary realism, more extensively, as neoliberalism. It upheld the substitution of taxpayer supported organizations and organizations with those conceded by private benefit hungry associations working in the business sector; deregulation of work and monetary markets; deregulation of business endeavors; facilitated commerce; and littler government through diminished assessments, spending and regulation. These methodologies were progressed for the purpose of free markets, money related advancement and people in general premium.
The new right contended that rival and unreasonable narrow-mindedness was of advantage to the entire society in capitalist social orders. It stated that as a country gets wealthier the wealth will 'stream down' to the poor on the grounds that it is contributed and spent along these lines making employments and growth. Indeed, the Global Financial Crisis has demonstrated that monetary markets give chances to ventures/investments that give; generally, a couple of additional jobs and that bolster an unsubstantial success that can be wiped out in days.
Neoliberal speculations were grasped by large businesses on the grounds that they gave a legitimation to their pursuit for self-interest and roads for business development. They encouraged the thought that government regulation meddled with business and undermined 'enterprise culture'. In this perspective, government interference in the administration of the economy is superfluous and rash on the grounds that the Market is a self-adjusting instrument. There was likewise some advance in free market belief system for governments too in that it acquitted them of obligation regarding economic accomplishments.
The consensus is that what is needed is major change of finance capitalism and that the present neoliberal model is depleted however, there is no new thinking being formulated about what options we may seek after or how nations can recapture control of their own fates.
The investigation of massive information sets and thorough modeling may give an increasing measure of comprehension of what turned out badly or what the present risks are, however these methods and tools of estimation don't give either imagination or estimations: the imagination of another framework, a more steady structural formulation; the estimations of a framework really redistributive and less harming to culture, environment and individuals. For this probability to happen, I think we will require either another accident more profound than the past one or global turmoil: The previous appears much more reasonable.
Outcomes, Disparities and Debt:
As neoliberal game plans were executed over the globe irregularities in riches and compensation extended and expanded neediness, restricting neoliberal theories that by growing the riches at the top everyone would be in a perfect circumstance.
Countries following IMF's direction did not flourish: 'the greater parts of those countries that have taken after the IMF's recommendation have encountered significant monetary emergencies: low or diminishing growth, a great deal more outside obligations and the stagnation that proliferates systemic neediness. Some countries that had declined the IMF's 'enhanced structural adjustment' loans were alternately better off (Kolko 1998, 21).
Forty four percent of individuals in developing countries live in poverty and unemployment multiplied in the recent decade of the twentieth Century. Admittedly, even the IMF concedes that 'in late decades, about one-fifth of the world populace has relapsed'.
Disparities in income in numerous nations, coming about because of neoliberal arrangements, implied that consumer demand couldn't stay aware of production limits. 'First-class home loans were forcefully sold to millions who couldn't regularly manage the cost of them by offering low "teaser" premium rates that would later be rearranged to raise installments from the new property holders.' The interest for lodging as a venture brought about the costs of the houses to expand much more.
Low-interest rates implied all the more that the home purchasers could bear to purchase homes and a greater amount of them could manage the cost of more lavish homes with the goal that house costs went up. Because of this, by 2004, Americans were utilizing home value to fund as much as $310 billion a year in individual utilization. And after four more years household debt was up to 93 percent of US GDP, and was a key driver of monetary development in the US.
Financial Market Coercion
Financial deregulation opens the economy to the vortex of theoretical capital developments that is, to the streams of fleeting fund looking for speedy benefits. Case in point, just ten percent of exchanges in the businesses speak to genuine exchange. Correspondingly, the Editor of the Financial Times, Peter (Norman 1994), watched: Because they handle the numerous billions of dollars-worth of speculations streaming crosswise over national outskirts every day, the business sectors have turned into the police, judge and jury of the world economy—a stressing thought given that they have a tendency to view occasions and arrangements through the mutilating lenses of apprehension and eagerness
Governments that attempt to go astray are rebuffed by the businesses, specifically, 'the major universal banks, substantial transnational organizations with major budgetary dealings, store chiefs inside of key private money related establishments, and the key FICO assessments offices. An economy presented to the free stream of worldwide money capital, on the other hand, is fixated on the need to assuage universal agents, to hold their 'certainty': the push of strategies in such an economy in this way, even on a basic level, is not towards serving the premiums of the individuals but rather towards serving the premiums of the theorists, which speaks to a reversal of majority rule government.
Financial deregulation included three actions: the opening up of a country to the free stream of capital all through it; the evacuation of regulations on monetary establishments working inside of a nation; and the expulsion of political controls from the national bank. Along these lines the money related area of a country turns out to be a part of the universal financial division as opposed to a part of the domestic economy and it serves the interests of worldwide monetary establishments instead of the interests of the individuals or national governments.
Nations can at present hold a lacquer of vote based system with decision between significant gatherings, but since of the imperatives forced by the need to please global money related markets, the arrangement contrasts between the real gatherings is insignificant. Thomas Friedman utilizes the term the 'Electronic Herd' to allude to ‘the faceless stock, security and money dealers sitting behind computer screens everywhere throughout the globe, moving their cash around with the snap of a finger from safe heaven to developing market reserves’ and the 'huge multinational partnerships that now spread their industrial facilities around the globe, continually moving them to the most proficient, ease makers'.
To be allowed to move their cash around, financial companies and transnational enterprises that needed financial deregulation. David Korten (cited in Barlow and Clarke 2002, 93), once a senior consultant to USAID, says of these examiners: Each day, they move more than two trillion dollars around the globe looking for fast benefits and safe heavens, sending trade rates and stock markets into wild gyrations completely random to any basic financial reality.
New Capitalism?
In the economic domain, globalization will keep on propelling in the commercial and productive sector; in the social domain, the expert class and information based free enterprise will keep on flourishing; as a trade-off, in the political domain the democratic state will turn out to be all the more socially situated, and democracy more participative. Presently, after the 2008 worldwide emergency, what new administration of amassing will succeed it? Firstly, it won't be in light of financial private enterprise as this most recent period has taken a backward step in the history of capitalism.
Therefore, the new capitalism that will rise up out of this emergency will most likely resume the meritocratic philosophy that was available in the technocratic private enterprise of the thirty eminent years. The Fordist administration and its last demonstration, the thirty wonderful years of private enterprise, arrived at an end in the 1970s. Democratic societies had the potential to reprimand rentiers' oppressive share of the national income, yet neglected to examine the authenticity of meritocratic frameworks. There is no motivation to trust that commercial and productive globalization and in addition, social and cultural globalization and even political globalization will be ended by this emergency. Just financial globalization was naturally identified with commercialization; commercial and productive globalization was most certainly not. China, for example, is completely incorporated economically with whatever is left of the world, and is progressively coordinated on the creation side, however remains moderately shut in monetary terms.
In the interim, minimal development of social equity and political liberation will be accomplished if battle for human rights and social feedback keeps on being coordinated just against capital, rather than incorporating the meritocratic belief system that legitimizes the extraordinary increases of the professionals.
The number of students in school will keep on increasing, knowledge will turn out to be less scarce – which will add to the decrease of financial imbalance. The power and benefit of experts will keep on growing in connection to those of capitalists, in light of the fact that information will turn out to be the key and capital less and less so. Capital will turn out to be more bottomless with the introduction of capital-saving technologies and with the collection of rentiers' savings.
The only main source of falling imbalance in the short run will not just be on national level: it will be the result of the fact that rapidly developing nations will keep on catching up, and this merging means redistribution at the world-level that may, conceivably, balance local pay fixation. Disparity will begin in, on one side, the relative imposing business model of information, and, on the other, the descending weight on wages from movement and from imports from rapidly developing nations utilizing shabby work. Globalization, which in the 1990s was considered as a weapon of rich nations and as a risk to developing countries, ended up being a noteworthy development opportunity for the developing nations that count with a national advancement method. Income imbalance in rich nations will most likely escalate despite the fact that their phase of development is perfect with a deterioration of disparity in so far as innovative advancement is chiefly capital-saving, that is, it lessens the expenses or builds the efficiency of capital. With respect to developing nations, we should not expect, in the short run, more equality on the grounds that a considerable lot of them are in the fixation period of capitalist development.
Re-regulation will most likely go no more distant than expanding banks' capital necessities – the system received by the Basel Accord II (2004) that proved to be inadequate to stop the Global Financial Crisis. The Economist (2009c: 31) commented dramatically, on this regard: “applied to the banks that plunged Britain [or the world] into economic crisis, it strikes fear in the heart”. The rich will be less rich, however, they will keep on being rich, and the poor will get to be poorer; just the middle-income nations occupied with the new development technique will emerge stronger from this crisis. In November 2008, the G-20 pioneers marked an announcement conferring themselves to a firm re-regulation of their financial frameworks; in September 2009, they reaffirmed their dedication. The fundamental undertaking now is to restore the administrative force of the state to permit markets to perform their economic coordinating role.
In spite of the fact that the move to participative and – a step ahead – to deliberative democracy is not yet unmistakably under way, my prediction is that democracy will keep on advancing on the grounds that the weight of the workers and of the middle classes for more public participation will proceed. Moreover, Marx didn't predict that the bourgeoisie would have to share the power with the professionals seen as the vital element of production would be knowledge as opposed to capital and with the common laborers seen as the specialists vote. Such weight might some of the time lose effectiveness either on the grounds that individuals feel disappointed with the moderate advancement or, more important, in light of the fact that an ideology, for instance, neoliberalism is basically situated to community withdrawal: only private interests are significant. He didn't predict that the law based administration or the popularity based state that would rise in the twentieth century would have as one of its parts controlling the viciousness and visual impairment that describes private enterprise. At the point when Marx investigated free enterprise, the entrepreneur class had the imposing business model of political force, and he expected that this would change just by method for a communist insurgency. Regardless of some road accidents, financial advancement has been joined by changes in the extension and nature of democracy. This sort of dogma just makes the rich skeptical; to the degree that it is hegemonic, it renders the poor and the middle classes baffled and politically incapacitated.
Capitalism might, to put it plainly, turn into a servant instead of a master, and the slump will speed this change. I share this perspective, in light of the fact that history demonstrates that since the eighteenth-century progress, economic, social, political and environmental advancement has surely been occurring. In any case, subsequent to the capitalist revolution and the precise increment in the financial surplus that it yielded, progressive change toward a superior world, from private enterprise to equitable communism, is occurring. Mulgan is idealistic on this matter: “Just as monarchy moved from center stage to become more peripheral, so capitalism will no longer dominate society and culture as much as it does today."

Bibliography
Mabogunje, A. (2002). Poverty and Environmental Degradation: Challenges within the Global Economy. Environment: Science and Policy for Sustainable Development, 44(1), pp.8-19.
The American Private Enterprise System. (2011). 1st ed. [ebook] Kentucky: University of Kentucky College of Agriculture. Available at: http://www2.ca.uky.edu/agc/pubs/aec/aec90/aec90.pdf [Accessed 5 Aug. 2015].
Wegner, P. (2011). The democratic crisis of capitalism: Reflections on political and economic modernity in Europe. 1st ed. [ebook] Available at: http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper44.pdf [Accessed 5 Aug. 2015].
The Economist (2009a) “Briefing the state of economics”, July 18th 2009.
The Economist (2009b) “Unnatural selection” (leader), September 12.
De Tocqueville, A. (1840). Democracy in America. 1st ed. [ebook] David Reed. Available at: https://www.marxists.org/reference/archive/de-tocqueville/democracy-america/index.htm [Accessed 4 Aug. 2015].
UNCTAD (2009) The Global Economic Crisis: Systemic Failures and Multilateral Remedies. Geneva: United Nations, United Nations Conference on Trade and Development.
Beder, S. (2015). Financial interests and globallisation. [online] Herinst.org. Available at: http://herinst.org/sbeder/corppower/financialinterests.html [Accessed 3 Aug. 2015].
Beder, S. (2015). Neoliberalism and the global financial crisis. [online] Ro.uow.edu.au. Available at: http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1220&context=artspapers [Accessed 3 Aug. 2015].
Brechtforum.org, (2015). A New Capitalism? | The Brecht Forum Archive. [online] Available at: http://brechtforum.org/new-capitalism [Accessed 3 Aug. 2015].
Bresser-Pereira, L. (2015). Revue de la régulation. [online] Academia.edu. Available at: https://www.academia.edu/3033950/Revue_de_la_r%C3%A9gulation [Accessed 3 Aug. 2015].
Brune, N., Garrett, G. and Kogut, B. (2004). The International Monetary Fund and the Global Spread of Privatization. [online] IMF. Available at: http://www.imf.org/External/Pubs/FT/staffp/2004/02/pdf/brune.pdf [Accessed 3 Aug. 2015].
Dubovoy, S. (2015). Socialism and Communism. [online] Referenceforbusiness.com. Available at: http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Socialism-and-Communism.html [Accessed 2 Aug. 2015].
Gershman, C. and Allen, M. (2006). The Assault on Democracy Assistance. Journal of Democracy, 17(2), pp.36-51.
Herinst.org, (2015). Business-Managed Government - Washington Consensus - Outcomes. [online] Available at: http://herinst.org/BusinessManagedDemocracy/government/international/outcomes2.html [Accessed 3 Aug. 2015].
Miller, F. (1998). Aristotle's Political Theory. [online] Plato.stanford.edu. Available at: http://plato.stanford.edu/entries/aristotle-politics/ [Accessed 3 Aug. 2015].
Mulgan, G. (2009). After capitalism. Prospect. [online] Available at: http://www.prospectmagazine.co.uk/features/aftercapitalism [Accessed 3 Aug. 2015].
Quiaem, V. (2014). Neoliberalism. [online] Slideshare.net. Available at: http://www.slideshare.net/vincent_17236616/neoliberalism-35086341 [Accessed 3 Aug. 2015].
Sharon, B. (2008). The Corporate Assault on Democracy. [online] ResearchGate. Available at: http://www.researchgate.net/publication/26497623_The_Corporate_Assault_on_Democracy [Accessed 3 Aug. 2015].
The fiscal crisis: Some complicating factors. (1978). AAHE-ERIC/Higher Education Research Report, 7(4), pp.21-30.
In-text citation:
(The fiscal crisis: Some complicating factors, 1978)
(Sharon, 2008)
(Quiaem, 2014)
(Mulgan, 2009)
(Herinst.org, 2015)
(Miller, 1998)
(Gershman and Allen, 2006)
(Dubovoy, n.d.)
(Burton, 2013)
(Brune, Garrett and Kogut, 2004)
(Bresser-Pereira, 2010)
(Brainia.com, 2015)
(Beder, 2006)
(Beder, 2009)
(Barlow and Clarke 2002, 93)
(Norman 1994)
(Kolko 1998, 21)
(Hillyard and Tombs, 2004)
(Mabogunje, 2002) (De Tocqueville, 1840)
(Wegner, 2011)
(The American Private Enterprise System, 2011)

Similar Documents

Free Essay

A Criticism of Neoliberal Policies as a Method of Development

...A Criticism of Neoliberal Policies as a Method of Development * Neoliberalism is a philosophical theory that uses market value as the primary method of evaluating all aspects of life. Thus, the market is seen as the template for all other activities within a society, even those that involve an ethical dimension. (Paul Sukys, 2009) Thesis Statement: The pro-market principles that neoliberalism encourages do have benefits that, if managed realistically, are means of development and sustainment for countries worldwide. * “The neoliberal doctrine emphasizes competition over cooperation and in doing so encourages each individual to pursue his or her own well being, thus effectively creating "companies of one" who will sell whatever they possess (talents, property, abilities, education, and so on) in order to accumulate "points," in whatever way those points may be defined within a given system.” (Jason Read, 2008) * “Neoliberalization has not been very effective in revitalizing global capital accumulation, but it has succeeded remarkably well in restoring, or in some instances (as in Russia and China) creating, the power of an economic elite...” (David Harvey, 2007) * Neoliberalism is an ideology, method of governance, and a set of policies which originated out of classical liberalism and as a backlash to Keynesianism during the early 1980’s (Steger and Roy 2010:10-11) * Neoliberal intellectuals insisted that the ‘free market’ was a superior mechanism......

Words: 1846 - Pages: 8

Premium Essay

Causes of the Sovereign Debt Crisis

...In the immediate aftermath of the financial meltdown in 2008, the global crisis has made an important shift. By then not the private banking sector, from where the financial crisis originally emerged from, but sovereign states face the risk of default. In order to analyse the multifaceted character of the European sovereign debt crisis, this essay focuses on its systemic causes. Contrary to the argument of popular Northern European politicians and journalists that blame the inability of Southern European states to manage deficit spending, the Eurozone crisis is firstly determined by imbalances in the European Monetary Union, and secondly by imbalances in the global political economy. This paper argues that the vast amount of sovereign debt is therefore not the result of weak Southern European nations, but of inherent structural illnesses that ultimately led to the current crisis. This essay is divided into two sections. The first section examines the problems of the design of the European Monetary Union. In regard to the theory of an ‘Optimum Currency Area’ by Robert Mundell, it analyses the extent to which the EMU has failed to meet the criteria of optimised efficiency. In the absence of an adjustment mechanism for unequal development in Euro member states, the dominance of Germany as leading export nation created severe inequalities. The second section then focuses on the role of the global political economy and imbalances that were created in the ‘era of financialisation’......

Words: 2451 - Pages: 10

Premium Essay

Counteracting the Global Economic Crisis: Values, Institutions, Policies.

...Counteracting the global economic crisis: values, institutions, policies. When talking about the broad and complicated subject of economic crisis, it is important to mention ideas concerning neutralization of its consequences and prevention of future calamities. The current disturbance in the global economy requires not only to understand how it was initiated, but also how to counteract and draw conclusions from it. The Chinese proverb says: “may you live in interesting times.” These times are now- financial markets are in turmoil, China is rising as economic power, young people from Europe and America are protesting against, what they see as ineffective government and regulations. In next years the world will change even more- also thanks to changes, that will be made as an answer to the global economic crisis- in terms of values, necessary institutions and policies. The first step toward ending the crisis is to introduce new regulations, that would stabilize the market. Since 1980’s the American financial market has been experiencing a long period of deregulation. Although the obvious results of this move- the example can be the deregulation of savings and loans companies, that led to crisis in 1989, the process continued. Decade later, in 1990’s the new market instruments- derivatives, became increasingly popular. Although, their allies argued that they would stabilize the market, the opposite happened. Any attempt to regulate hedge funds was cut out by......

Words: 902 - Pages: 4

Free Essay

Economics

...current situation is also discussed and analyzed in this assignment. The suggestions to the government are also provided regarding neoliberalism in this assignment. Neoliberal Globalization Neo-liberalism refers to economic liberalism which has become very important in the international economy (Kotz and David, 1998). Neoliberal globalization is defined as setting up the market free and private enterprises are free from any bonds or regulations imposed by the government of the state (Ong, 2006). Neoliberal globalization mainly promotes the concept of free market economy. The rules of neo-liberal globalization include cutting the public expenditure and reducing the social safety net. It also involves reducing the government regulations or everything that could result in reduction in the overall business profitability of the private enterprises (Harvey, 2005). The state enterprises are sold to the private investors and concepts of ‘public good’ and ‘community’ are eliminated and the individual responsibility is increased. There is a huge criticism that this system usually involves pressing the poorest people within the society which could result in social distress within the society. At the global level, the neoliberal institutions are setting out the rules and regulations for free international trade and financial transactions in order to ensure the global economic growth (Greig and Hulme, 2007). It is a fact that when there is free trades between the countries then it......

Words: 1840 - Pages: 8

Free Essay

What Impact Has Neoliberalism Had on World Politics?

...What impact has neoliberalism had on world politics? Neoliberalism is an economic philosophy that rose in prominence from the eighties following the elections of Margaret Thatcher and Ronald Reagan. Jones, Parker and Bos (2005: 100) summarise the essence of this view as “markets good, governments bad”. Neoliberalism argues that free trade is beneficial to all nations, that governments create inefficiency and waste, and that the distribution of goods should therefore be left to individuals and firms competing in the market to maximise their utility (WHO 2010). To ensure an efficient allocation of resources, neoliberalists argue for widespread liberalisation i.e. the reduction of rules and restrictions, and the privatisation of public enterprises. However, the reality of Neoliberalism has been very different to the theory. Regulation provides the framework within which markets work and enables the moderation of the externalities they produce, thus deregulation was in fact limited and was quickly followed by regulation (Levi-Faur 2005: 13). Because of this, Polanyi (in Peck, 2010: 330) writes: “the road to a free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism”. In this essay, I look at the impacts of Neoliberalism on World Politics, focusing on two in particular. Firstly I explain that the policies of liberalisation and privatisation, albeit supported by regulation, have led to increasing......

Words: 2185 - Pages: 9

Premium Essay

Finance

...Introduction There have been some major financial crises in the world in the recent past. The crisis are the European Monetary System that occurred in 1992-1993, The Mexican crisis 1994-1995, the Asian crisis 1997-1998 and the recent global financial crisis 2007-2009. The recent financial crisis has affected the international trade. The financial crisis began in the United States in 2007 in the housing market resulting in foreclosures. The crisis continued to grow and eventually turned into a global financial crisis as well as an economic crisis. As a result, some major banks, insurance companies and investment houses faced bankruptcy while others needed financial aid to continue operating. Many businesses involved in the international trade have been struggling in their financial management during the credit crunch because a business is supposed to remain successfully even during crisis times. The managers in businesses involved in the international trade have had to make decisions to help their organizations stay afloat during the financial crisis. Economists are of the opinion that a financial crisis results from feeble economic fundamentals for instance, fiscal deficit, reduced foreign reserve and increased foreign debt among others. The financial crisis eased in 2009 but its effects were felt globally. The effects on the international trade occur because of the trade links among countries at the global market through a contagious effect (Glick & Rose, 1999). The......

Words: 3597 - Pages: 15

Premium Essay

Accounting Theory

...temporarily poorer, or simply promote and report severely conservative estimates of future earnings. And this phenomenon of accounting scandal exist in contemporary society. The integrity of the accounting profession and the credibility of financial information provided by businesses have been undermined by scandals. Accounting and business education should pay more attention to the ethical to prevent accounting scandals. And they should not be focused on the teaching of accounting techniques. Neoliberal ideology is a political movement beginning in the 1960s that blends traditional liberal concerns for social justice with an emphasis on economic growth. And it is similar to globalization. Globalization includes three elements that are difficult decreasing, quick response to alterations, and multilateral trade liberalization. And accounting professional contains individual professional judgment and professional self-regulation. Globalisation brings many benefits but also a number of problems, for instance, low price labour used by multinationals that Increasing wages for highly-skilled workers and reducing wages for less-skilled workers obviously leads to greater inequality. Neoliberalism has also been unable to address growing levels of global inequality. In order to better focus on ethical education, accountants should consider ethical issues in various directions. And they should understand the requirements of students’ future employer, and how to guide students into a......

Words: 3366 - Pages: 14

Free Essay

Rise of Export Processing Zones

...The post-WWII era was a period that brought about significant global social and economic change. With the conversion from domestic to export production due to increasing domestic production costs, First World nations sought after Third World labour as a way to reduce production costs. The rise of Third World industrialization, or newly industrialized countries (NICs), in the 1970s and growing throughout the rest of the century allowed the First World to keep up with rising consumption rates while keeping labour costs low. To represent the shift to export production, and to serve firms seeking lower wages and Third World governments seeking capital investment, export processing zones (EPZs) were created. Most EPZs are located in developing countries, and these zones attract employers as a solution to domestic production while also taking advantage of reduced trade barriers set up by the host nation in an attempt to reduce poverty, unemployment, and stimulate their domestic economy. The creation of these EPZs supported the rise of neoliberal globalization and the free market system throughout the latter half of the 20th century, which stated that the private sector would determine state priorities. This paper will examine the rise of EPZs and their connection to neoliberal globalization, as well as their relationship to the debt crisis of the 1980s and the growth of structural adjustment programs. With the Cold War immediately following WWII, countries were divided into a......

Words: 2265 - Pages: 10

Free Essay

Investigating the Factors That Have Led to Significant Underdevelopment in Guyana, What Practical Solutions Can Be Suggested to Help Improve the Economic and Political Performance of This State?

...the opportunity to break with some old PNC practices’. The recognition of the need for free enterprise in order to re-stimulate the optimism of a whole population formed the basis of Hoyte’s, and subsequent presidents’, prevailing actions. This chapter sets out to explore the extent to which Guyana has since broken free from the shackles of socialism as a result of various government and international institution-led initiatives, and explores the impact on Guyanese development as a result. By analysing the initial success of the IMF-World Bank backed austerity and recovery program implemented in 1988; CARICOM’s aim to break down the divide between the ‘core’ states and the Caribbean as a ‘peripheral’ region; and the effect of regular financial aid as a result of Guyana’s status as a heavily indebted poor country (HIPC), one quickly realises the apparent commitment of Guyanese governments to the cause of market liberalization and the desire to maximise the theoretical benefits. However, the stagnation of economic growth in the mid 1990’s suggests that despite good intentions, Guyana has failed to prosper under the conditions of re-privatisation and improved access to open international markets as a result of IMF and World Bank support. The neo-liberal nature of these new conditions and Guyana’s subsequent apparent failure are no coincidence. The economic parameters set out under IMF instruction and the reduced role of the state resembles similar conditions present prior to...

Words: 3683 - Pages: 15

Free Essay

Current Event Focus

...how the current form of globalization, neoliberalism, free trade and open markets are coming under much criticism (Shah, 2011). The interests of powerful nations and corporations are shaping the terms of world trade. In democratic countries, they are shaping and affecting the ability of elected leaders to make decisions in the interests of their people (Shah, 2011). In addition the author describes that elsewhere they are promoting narrow political discourse and even supporting dictatorships and the “stability” that it brings for their interests. This is to the detriment of most people in the world, while increasingly fewer people in proportion are prospering (Shah, 2011). In consequence, the author makes the reader aware of how the western mainstream media, hardly provides much debate, gladly allowing this economic liberalism (a largely, but not only, politically conservative stance) to be confused with the term political liberalism (to do with progressive and liberal social political issues) (Shah, 2011). Margaret Thatcher's slogan of “there is no alternative” rings sharply. Finally, I loved this article because it left me with a great question in mind; perhaps there is no alternative for such prosperity for a few, but what about a more equitable and sustainable development for all? (Shah, 2011) Furthermore, I was very surprised with the way the author described how after following a period of economic boom, a financial bubble—global in scope—has now burst (Shah, 2011).......

Words: 499 - Pages: 2

Free Essay

Evironment

...of social justice? R. ALAN WALKS Department of Geography, University of Toronto Mississauga, Mississauga, Ontario, Cananda L5L 1C6 (e-mail: alan.walks@utoronto.ca) Canadian cities are at a crossroads. The neoliberalization of governance at multiple scales, inadequate re-investment in urban infrastructure, increasing reliance on continental and international trade, and the restructuring of the space economy have combined to weaken Canada’s cities just as the global economic system is undergoing transformation. Canadian urban geographic scholarship has much to offer under current conditions, and is already making significant contributions in key areas. In particular, research on what might be called the contours and impacts of urban restructuring and the neoliberal city, immigration and cities of difference, and urban environmental justice show much promise and are likely to define the core of Canadian urban geography into the future. Key words: cities, urban geography, Canada, economic restructuring, neoliberalism, social justice L’urbain ` une ´poque fragile, incertaine et a e n´olib´rale: vers de nouvelles g´ographies de la e e e justice sociale? ` Les villes canadiennes sont a la crois´e des chemins. e Alors que l’´conomie mondiale traverse une p´riode e e de transformation, la situation des villes au Canada se pr´carise avec les effets de la restructuration e ` n´olib´rale de la gouvernance a multiples niveaux, e e l’insuffisance du r´investissement dans les e......

Words: 8534 - Pages: 35

Premium Essay

Macro Management

...organisations are subject to organisations as they live their lives through shopping, reading, watching TV, etc. I shall devote this document to explore the ways used by the powerful to maintain their privileges in spite of wide human suffering. The first part of this document leads a discussion on the macro context of management and organizational activity tackling the developing crisis proneness within current capitalist societies (Lerbinger, O.; 1997:ix) (Shrivastava, 1993:24) (Perrow, 1984), (Pauchant, T.; 1988) (Castellano; 1999). Secondly, it is discussed how oppressive practices at organisations are historically ridden. This chapter analyses the roles of colonial and postcolonial conditions in shaping the performance of social relations within organisations including the role of exclusion, leadership, education, and the State (Montaner, C.A., 2001), (Freire, 1996), (Thorpe, R.; 2000), (Boal, A.), (Burgoyne, J. and Reynolds, M.; 1997), (Burgoyne, J.; 2000), (Cunningham, I.; 2001), (Lee, M.; 1997), (Snell, R.; 1997). Thirdly, I shall discuss the impact of global trends and policies such as neoliberalism and globalisation that make sound impacts on organisations, individuals working at the organisations, and to the society as a whole. The role of the state, the politicians, and managers about these problems are addressed all along the document showing how the apparent politically neutral position of management and organisations is a too narrow view that impedes a more......

Words: 7321 - Pages: 30

Premium Essay

The Endless Crisis

...THE ENDLESS CRISIS REPORT Introduction The Endless Crisis was written by John Bellamy Foster, the editor of Monthly Review and professor of sociology at the University of Oregon collaborating with Robert W. McChesney. The article came originally from the introduction of the book called The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China. The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding. Different views on the Stagnation In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential......

Words: 6358 - Pages: 26

Premium Essay

Yasuni Itt

...should take on, both intellectually and politically. The concept of “development” has been recycled and reborn again and again for all its critics and detractors. However, in a strict sense it has never been questioned as a concept, nor how to best achieve it. Whereas “human” development, “sustainable” development, development “with a gender perspective”, etc. are important advances to create world that is more humane, environmentally friendly, and equitable, they do not seek to change what is at the root of the accumulation and (re)distribution models inherent to capitalism.2 Taking this into account, it is interesting to analyze the political project that is being carried out in Ecuador since 2007. It has proposed, to the national and global citizenry, a paradigm shift that not only seeks to leave behind the concept of “development” – and with it of capitalism – but also to construct a society which holds as its axis the factors that ensure the living conditions of human beings and nature. This proposal has been publicly known as the “society of good living” or “sumak kawsay”. It is a new model, which stemmed, in the case of Ecuador, from a constitutional dynamic which resulted in the establishment of a novel collective pact of coexistence. That is, it led to the development and popular approval of a new Constitution in 2008. 1 National Secretary for Higher Education, Science, Technology, and Innovation and Chair of Ecuador ́s Council on Higher Education. He was National......

Words: 7238 - Pages: 29

Free Essay

Power and Wealth Are Intricately Linked

...POWER AND WEALTH Individual Assignment “Power and wealth are intricately linked. Critically discuss drawing on at least two perspectives from the field of International Political Economy and practical examples from the global political economy”   Introduction Robert Gilpin (1975) once defined International Political Economy as the “reciprocal and dynamic interaction in international relations of the pursuit of wealth and the pursuit of power”, allowing for the understanding of the relevance of power and wealth in the global economy. The study of International Political Economy provides an understanding of the interaction between the Market and the State, as well as the importance of their existence within countries around the world. In studying this particular area, it is important to familiarize oneself with the key elements and determinants which make up the global economy. Two factors which play an essential role in the global political economy are Power and Wealth. These are considered to be significantly linked, as they share many similar attributes, and many corporations and actively involved members of the State seek to achieve and/or maintain both aspects. Power is globally acknowledged as the ability to influence the behavior in other individuals, or the authority to make decisions. As illustrated by Dahl (1957), the intuitive idea of power allows for the understanding that “A has power over B to the extent that he can get B to do something that B would not......

Words: 3229 - Pages: 13