Capitalism And Its Effects On Economic Depression

Widespread unemployment and frequent bouts of economic depression have been a reality as long as capitalism has existed. None of the economic theorists presented in Hunt’s History of Economic Thought try to seriously deny this. Instead what can be found are different opinions regarding who or what might be to blame for the lack of stability in these capitalist economies. Offered here are many of these different views, but presented in two distinct categories. The first is made up of theorists who defend the automaticity of capitalism and blame a lack of market freedom in their economic systems for causing depression and unemployment. The second is made up theorists who appear to accept the realities of the market and blame the anarchical nature of capitalist markets. It is those that accept the failures of capitalism, however, who present not only a proposed source of economic disparity, but also a justifiable solution, whose arguments seem most applicable to the economic real ity that is capitalism. Automaticity of Markets Free of Economic Depression Most economic theorists who defend the automaticity of markets within capitalism make one common assumption: that people just keep on spending. From a macroeconomic view, it will be seen that this assumption lends itself toward keeping a capitalist market well fed – that is to keep supply and demand in equilibrium. In this section, we’ll take a look at the arguments made by theorists from both the labor theory and the utilityShow MoreRelatedThe Cold War And The International Political Economy1076 Words   |  5 Pagesforty years ago. The economics of the high Cold War The article explains events that came before the transformative decade of the 1970s. 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