StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Joseph Stiglitz - Why We Have to Change Capitalism - Essay Example

Cite this document
Summary
The paper "Joseph Stiglitz - Why We Have to Change Capitalism" is a great example of a management essay. The advent of the great recession set a host of debates on the modern-day world economies. Major economies underwent a major shakeup during the great recession. The slump exposed the various flaws that exist in the economies…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.3% of users find it useful

Extract of sample "Joseph Stiglitz - Why We Have to Change Capitalism"

Capitalism Name Course Lecturer Introduction The advent of the great recession set a host of debates on the modern day world economies. Major economies underwent a major shake up with during the great recession. The slump exposed the various flaws that exist in the economies. At the same time, potential risks that were never seen before also became unearthed by the great recession. It is with the great recession that most economies in the world had a point in case to reevaluate themselves. However, many economies wished the great recession away and down played the flaws that it elicited. In the book freefall, Stiglitzt reveals his fears about the modern day economies in the world. The launch of the book freefall comes just after the world had undergone the great recession. It is from the great recession that various economies were dwindled within a day with many people adding to the statistics of those living in poverty. The great recession could have been avoided if at all the stake holders in the economy worked in synergy for the common good. Despite the modern day economy having liberalized markets, globalization and all advancements associated with it having guaranteed prosperity to all, it still lacked the very essential component which was better risk management. Lack of risk management within the modern day economies meant that the business cycle was not complete hence the vulnerability of the economy to fluctuations was not eliminated (Astley et al 2009, p. 8). For a very long time, the economies of the world have been driven by principles of a free market. These principles have worked for many years. However, times are changing and various faults have started to emerge in the economies managed by this doctrine. Most economies are not proactive in trouble shooting. Such economies do not have proper analytical capabilities to allow for the trouble shooting of potential risks that the economies are likely to face. This means that the economies are more than ever exposed to risks (Bauer et al 2009, p. 4). Governments have a major role to play in the building of stable economies. They are responsible for setting up of regulations that govern the economy. However, this mandate has not been actualized effectively by governments. Most governments are coming up with regulations that hamper the dynamism that ought to exist in economies. The regulations hamper innovations hence various economies are at a stand still. In addition, the regulations expose economies to numerous risk factors. For instance, the central ought to be independent (Acharya and Richardson 2010, p. 6). However, this is not the case since the central banks are regulated and it renders the operations of such an essential body untenable (DeNavas-Walt et al 2010, p. 5). Americans have a culture of believing in their strong economic dominance in the world. The recession exposed the various flaws that exist in world economies. Americans having for a long time believed in the dominance of their economy in the world has come to be tested. But instead of embracing the flaws exposed by the recession, Americans denied the magnitude of problems that were associated with the recession. Most of the flaws that were exposed have never been addressed or resolved to date. This means that the American economy is still sitting on a time bomb and it is only a matter of time that everything gives way. There are numerous grievances which still ought to be addressed for the American economy to retain its stability. For instance, the middle class in the society are grappling with remunerations problems. As a result, there is need for the reevaluation of policies and values that drive the American economy (Garnaut 2009, p. 8). According to Stiglitzt, there is need for the Americans to reevaluate and reflect on the need to establish social order and do away with private enterprises. Free enterprises have greatly affected the social order and brought about the degradation of social norms. Private enterprises have propagated the establishment of covetousness in the society. As a result, the society has undergone moral decay. This means that even though growth of the economy is visible it posses negative effects to the society. The community does not address common needs as a result of selfishness and greed having eroded the sense of a community having common goal. As a result, social disorder has thrived with many people being exploited and the growth of such an economy only worsens the social divide (Posner 2009, p. 6). It is about time that Americans seriously reevaluated their economic model. The economic model propagates immorality. The markets are driven by vested interests since the participants in down grade morality. As a result, the pursuit of the self interests makes the society drift further away from achieving social well being. The individualism has resulted in the regarding of the community as a useless entity. At the same time, trust in the society has been eroded by the greed that exists in the economies driven by vested interests. The existence of autonomy can solely be blamed on the government since its regulations allow it to thrive at the expense of social well being (Shiller 2008, p. 4). Development of economies solely depends on various factors. Trust is the most essential aspect in the growth and stability of an economy. The existence of trust means that various stake holders in the economy work in synchrony towards achievement of common goals. The presence of trust means that the society’s well being is also considered while the economy grows. Various stakeholders in the American economic model have lost trust with each other. Lack of trust among the stakeholders has not gone well. Trust is an essential aspect in the growth and stability of the economy. Growth of any economy is based on the amount of trust that the stakeholders have with each other. Lack of trust simply exposes the economy to more risks and undermines the existence of the society. There is lack of trust in essential links in the economy such as between banks and the society. As a result, banks were forced to undertake high risk activities in order to keep existing. The banks reverted from being commercial institutions to investment groups. Such risks have led to the banks having to put up with high capital to pay high insurance deposits (Shiller 2008, p. 4). The recession not only exposed flaws in the economic model, cracks were also evident in the society. It was clear that the society existed in two parallel streams. For instance, there was a clear divide between the rich and the poor. It became evident that the living standard of the rich was growing tenfold at the expense of the rest of the society. At the same time, the income of other Americans was at a standstill or even having undergone a deep over the years. The recession also exposed some of the greatest fears of the American economy. The biggest spenders in the economy were the middle class. As a result, a bulk of the middle class lived in debt after having taken many loans. The middle class consumed beyond their means yet their incomes were minute. With the middle class forming a bulk of the society, it was evident that the American economy was already in debt. One of the strategies to be put in place to avoid the over expenditure is through consumer protection. Consumer protection enables the Americans to live within their means and avoid over expenditure and going into unnecessary debts (Taylor 2009, p. 22). The effects of the slump could have been averted if only a proper analysis of an American economy was done in time. There are numerous ways through which the economy and the society can be structured in order to pave way for an economic growth that is realistic and stable. For this to happen, the role of the government needs not to be restricted to offering bail out services. Governments ought to establish and also reconsider some of the regulations that govern the economy. For instance, the revising of the Glass-Steagall act to prevent the commercial banks taking advantage of the safety net that is offers. The political elite should not just wish away the recession and its effects. Wishing away means that various issues still go unresolved and this only precipitates a bigger crisis’s in the future. Governments need to restructure the salaries and also control various aspects of the economy such as taxation (Roberts 2009, p. 242). The society ought to be motivated to value ethics. Motivation will be done by enabling them to understand the significance of ethics to the economy. Worthiness of ethics will enable issues such as trust that catalyze economic growth being strengthened. Ethical responsibility begins with the financial sector owning up to the effects generated with the recession’s aftermath. The financial sector ought to avoid engaging in blame games especially shifting it to those it ill-treated during the recession period since it does help. It is from this perspective that the American economy will pick up (Grusky et al 2011 p. 224). The slump acts like an eye opener to the world’s economies. It offers the Americans a chance to create a new financial system that will advocate for the role of a financial system in meeting the needs for human beings. The new economic system ought to also provide social well being through the creation of meaningful jobs are created, provision of decent work for all those who want to work and the narrowing the gap that exists between the rich and poor rather than widening the gap. For this to happen, individualism has to be done away with. Americans should work together to realize the setting up of an economy they all are proud of and can live comfortably since their future will be well secured (Grusky et al 2011 p. 224). Conclusion Americans want to live a decent life and be able to fulfill their dreams, goals and aspirations. The building of a robust and stable economy solely depends on the ability to realize the chance they have to seize the opportunity. Americans ought not to overlook the happenings of the recession, but to take it like a lesson to prevent future occurrence of crises of such a magnitude and also how to handle such a situation in the eventuality it repeats itself in the future. References Acharya, V, V, and M, Richardson, 2010, ‘Causes of the financial crisis’, Critical Review, Vol. 21, No. 2-3. Astley, M, Giese, J, Hume, M, and C. Kubelec, 2009, ‘Global imbalances and the financial crisis’, Bank of England Quarterly Bulletin, 2009Q3. Bauer, Paul and Michael, Shenk, 2009, “Productivity in the Recession and Going Forward.” Economic Trends, Federal Reserve Bank of Cleveland. DeNavas-Walt, Carmen, Bernadette, D, Proctor, and Jessica C, Smith, 2010. “Income, Poverty, and Health Insurance Coverage in the United States: 2009.” Current Population Reports P60 238. Washington, DC: U.S. Census Bureau. Garnaut, R, 2009, The Great Crash of 2008, Melbourne University Press, Clayton, VIC. Posner, R, A, 2009, A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression, Harvard University Press, Cambridge, Mass. Rampell, C, 2009, ‘Great Recession: A Brief Etymology’, New York Times, March 11, 2009. Shiller, R, J, 2008, The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It, Princeton University Press, Princeton and Oxford. Taylor, J, B, 2009, Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, Stanford, California: Hoover Institution. Robert, M, 2009, The Great Recession, Lulu Enterprises Incorporated, p. 220-342. David, B, Grusky, Bruce Western, Christopher Wimer, 2011. The Great Recession, Russell Sage Foundation, p.201-234. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Joseph Stiglitz - Why We Have to Change Capitalism Essay Example | Topics and Well Written Essays - 1500 words, n.d.)
Joseph Stiglitz - Why We Have to Change Capitalism Essay Example | Topics and Well Written Essays - 1500 words. https://studentshare.org/management/2039691-joseph-stiglitz-why-we-have-to-change-capitalism
(Joseph Stiglitz - Why We Have to Change Capitalism Essay Example | Topics and Well Written Essays - 1500 Words)
Joseph Stiglitz - Why We Have to Change Capitalism Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/management/2039691-joseph-stiglitz-why-we-have-to-change-capitalism.
“Joseph Stiglitz - Why We Have to Change Capitalism Essay Example | Topics and Well Written Essays - 1500 Words”. https://studentshare.org/management/2039691-joseph-stiglitz-why-we-have-to-change-capitalism.
  • Cited: 0 times

CHECK THESE SAMPLES OF Joseph Stiglitz - Why We Have to Change Capitalism

Government and Pure Capitalism

… The paper "Government and Pure capitalism" is an outstanding example of an essay on business.... does not practice pure capitalism.... This is because while capitalism rejects any form of government intervention in economic affairs, the U.... The paper "Government and Pure capitalism" is an outstanding example of an essay on business.... does not practice pure capitalism.... This is because while capitalism rejects any form of government intervention in economic affairs, the U....
1 Pages (250 words) Essay

Federal and State Influence on Human Resource Policies

Of course, there is nothing stopping a school from hiring unqualified teachers or teaching what they want to teach but in such cases, the subsidies given by the government can not be taken while other regulations may step in if the graduates of such schools have to function within our society.... For example, communist countries and capitalist nations often have very different approaches to management and the administration of human resources but for the larger part, government regulations on certain sectors can greatly affect individuals within the country....
1 Pages (250 words) Essay

The Theory of Capitalist Development by Paul Sweezy

His socialism form of society is a society in which we have no individual owner of means of production.... Paul Sweezy stated that Marxian economics is the economics of capitalism and capitalist economics is the economics of socialism.... Paul Sweezy stated that Marxian economics is the economics of capitalism and capitalist economics is the economics of socialism.... This statement depicts the work of Karl Marx who gave the negative side of capitalism and advocated for a socialist form of society....
2 Pages (500 words) Assignment

Golden Age of Capitalism

… The paper “Golden Age of capitalism” is a breathtaking variant of the literature review on macro & microeconomics.... The golden age of capitalism refers to the period of the international economic prosperity of the mid 20th century.... The paper “Golden Age of capitalism” is a breathtaking variant of the literature review on macro & microeconomics.... The golden age of capitalism refers to the period of the international economic prosperity of the mid 20th century....
7 Pages (1750 words) Literature review

Why Capitalism Triumphs in the West and Fails Everywhere Else

… The paper “The Mystery of Capital  - Why capitalism Triumphs in the West and Fails Everywhere Else - by Hernando De Soto” is a dramatic example of book review on social science.... The paper “The Mystery of Capital  - Why capitalism Triumphs in the West and Fails Everywhere Else - by Hernando De Soto” is a dramatic example of book review on social science.... e Soto as well argues that this role of the property was much investigated and realized by Marx, thereby providing the foundation for the critique of capitalism by the Marxists....
9 Pages (2250 words) Book Report/Review

Varieties of Capitalism Approach

Manager can simply reduce resistance to change among the staffs through participation and involvement.... … The paper "Varieties of capitalism Approach " is a good example of a management assignment.... The paper "Varieties of capitalism Approach " is a good example of a management assignment.... nbsp;One of the prominent obstacles for implementing workplace change is parochial self-interest.... This result from the failure of some people to consider the effects of change for organizational success hence become more concerned with change implications for themselves and how it would affect their own interests....
7 Pages (1750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us