Those who do not study the lessons of history are bound to repeat its errors.
On the planet earth, after thousands years of evolution and civilization, by 20th century, human society converged into two main branches economic and political ideologies. One called Capitalism, the other Communism. By mid 1980s, approx. 1/3 of world population was under communist regions, most of the other 2/3 was under capitalist region.
Industrial revolution: American Capitalism, 1776 to 1848 http://www.learner.org/ biography of America.
This was the kind of capitalism that Adam Smith, the Scottish economist, had called for in his master work, The Wealth of Nations, which was published, interestingly, in 1776. Smith argued that the production of wealth would increase dramatically if individuals were allowed to pursue their self-interest, with little interference from government. And in serving their own interests, individuals would serve the public interest, unconsciously, as if guided, as he said, by an "unseen hand." Better the unseen hand than the hand of the State.
Smith's theory coincided with a long-developing American tradition of individualism and opposition to government interference.
Almost everyone recognizes Smith as the founder of laissez-faire economics. Less well known are his ideas of about the division of labor. The division of labor, he insisted, would greatly improve the efficiency of workers.
To make his point, Smith described the workings of a pin factory. One person making a pin could make perhaps one in a day, maybe a few more. But if the job were divided into ten parts and given to ten workers, each performing a specialized function, a small factory could turn out 48,000 pins a day. This was the assembly line a century and a half before Henry Ford was credited with inventing it.
At the turn of the 19th century, America began to change almost in accordance with Smith's ideas. What we commonly call the American Industrial Revolution was actually two converging revolutions: a technological revolution based on the division of labor, and a commercial revolution powered by a deep faith in economic individualism and unrestrained competition.
In economic sense, capitalism is an economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy.
Marxian economics
Capitalism will be eventually substituted by worldwide socialism and communism. - Marxian
One of the saintly father figures of the communist ideology is the 18 Century German Philosopher name Karl Marx. His communist doctrine (one call Les Capital) was feverishly followed by most Communist countries at the time. Marx thought that Capitalism is one of the most advanced human existence in the world, yet, the ultimately human ideology will be the communist. He once famously wrote that: Capitalism will be eventually substituted by worldwide socialism and commnunism.
Karl Marx considered capitalism to be a historically specific mode of production (the way in which the productive property is owned and controlled, combined with the corresponding social relations between individuals based on their connection with the process of production) in which capital has become the dominant mode of production.[20] The capitalist stage of development or "bourgeois society," for Marx, represented the most advanced form of social organization to date, but he also thought that in the near future it would be substituted by worldwide socialism and communism.
The modern rivalry
Democratic capitalism and communism were rival Western / European styles of political economy in the Cold War. This ended in 1989 when the communist Soviet Union collapsed in the face of the greater economic strength of the US and its allies.
By early 21 Century, only a handful single party run communist country left on the plenty. The largest one is China.
However, 45 years after WWII, it is communism that was falling into catastrophic disintergration. Due to the worsening economic conditions, by 1990, most of East European blocks of the Communist government lost their power and replaced by capitalst or pro capital list. By 1991, the big brother, i.e. the Soviet Union was also falling. The reformist Goberchov was replaced by Boris Yelsin led Capitalist government.
At the time, communist were represented by two key states, Soviet Union and People’s Republic China, following by East European block of countries such as Hunagary, Poland, Czech etc. Asian countries such as Vietnam, North Korea, others such as Cuba.
The boom of capitalism
At same time, despite its inevitable ups and downs, the capitalist countries are thriving. It was led by the last remaining super power, USA. Follow by main power such as UK, EU, Japan and the newly joint capitalist Russia is also catching up fast.
After some major set backs such as the great depression, world war II and 1970 oil shock and great inflation, capitalist country restarted their economy train with the full speed. Japan lead the drive but hit the speed bump in early 1990s and slowed to a crawl ever since. Among the Western economies, led my Anglo-Saxo economy such as US and UK. It also enjoyed a relatively free ride until dot.com and 9/11.
"The state of our union is strong," said Clinton in 19/1/1999 in his seventh State of the Union address to Congress, noting that the United States is enjoying the "longest peacetime economic expansion in our history -- with nearly 18 million new jobs, wages rising at more than twice the rate of inflation, the highest home ownership in history, the smallest welfare rolls in 30 years, and the lowest peacetime unemployment since 1957."
Clinton observed that "for the first time in three decades, the budget is balanced." Predicting that the nation would have budget surpluses for the next 25 years.”
Despite the 1997 Asia crisis and 98 Russian default, it only created brief skirmish in US market. Dow did for 20% in 2nd half1998 but recovered quick by the year end. Greenspan was saying:
The major reason for the ralatively long and buyount growth in economy can be attributed to Regan/Margaret era in early 80s. Their free market policy approach created a prolonged prosperous period however, it was said also soiled the seeds for the latest credit freeze crisis.
the Western economy have relatively minor hiccups since the early eighties.
By early 21th Century, it’s estimated 55% world GDP is concerntrated in advanced
capitalist countries.
One of the main characters in the history of the capitalism is its cyclical boom and bust phenomenon. Traditionally, the economy would sustain a long period of strong growth (the boom) then follow by a shorter period of recession (the bust). Generally, the recession was triggered by certain financial crisis.
Let’s have a look some more distinctive boom and burst cycle in the chapter of timeline.
The boom/bust characteristic of asset and credit markets leads to the cycle of greed and fear.
The real globalization: globalize banking regulatory framework/system.
Not to be outdone, Brown, in an Oct. 17 op-ed in the Washington Post, also called for a "new Bretton Woods." The same "sort of visionary internationalism is needed to resolve the crises and challenges of a different age. And the greatest of global challenges demands of us the boldest global cooperation," he wrote.
Brown declared the old postwar financial institutions "out of date" and in need of rebuilding to deal with a "wholly new era in which there is global, not national, competition and open, not closed economies." He reiterated calls for cross-border supervision of financial institutions, shared global accounting standards, "more responsible" executive pay and a role for international institutions to serve as an early-warning system.
The typical sequence of boom and bust has an asymmetric shape. The boom develops slowly and accelerates gradually. The bust, when it occurs, tends to be short and sharp.[i]
2008: The global economic discontent: marks the rejection of the flawed ideology that unregulated global financial markets promote financial innovation, market efficiency, unhampered growth and endless prosperity while mitigating risk by spreading it system wide.
1 Speech by Mr. George Soros at CICC Forum, November 21, 2008
On the planet earth, after thousands years of evolution and civilization, by 20th century, human society converged into two main branches economic and political ideologies. One called Capitalism, the other Communism. By mid 1980s, approx. 1/3 of world population was under communist regions, most of the other 2/3 was under capitalist region.
Industrial revolution: American Capitalism, 1776 to 1848 http://www.learner.org/ biography of America.
This was the kind of capitalism that Adam Smith, the Scottish economist, had called for in his master work, The Wealth of Nations, which was published, interestingly, in 1776. Smith argued that the production of wealth would increase dramatically if individuals were allowed to pursue their self-interest, with little interference from government. And in serving their own interests, individuals would serve the public interest, unconsciously, as if guided, as he said, by an "unseen hand." Better the unseen hand than the hand of the State.
Smith's theory coincided with a long-developing American tradition of individualism and opposition to government interference.
Almost everyone recognizes Smith as the founder of laissez-faire economics. Less well known are his ideas of about the division of labor. The division of labor, he insisted, would greatly improve the efficiency of workers.
To make his point, Smith described the workings of a pin factory. One person making a pin could make perhaps one in a day, maybe a few more. But if the job were divided into ten parts and given to ten workers, each performing a specialized function, a small factory could turn out 48,000 pins a day. This was the assembly line a century and a half before Henry Ford was credited with inventing it.
At the turn of the 19th century, America began to change almost in accordance with Smith's ideas. What we commonly call the American Industrial Revolution was actually two converging revolutions: a technological revolution based on the division of labor, and a commercial revolution powered by a deep faith in economic individualism and unrestrained competition.
In economic sense, capitalism is an economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy.
Marxian economics
Capitalism will be eventually substituted by worldwide socialism and communism. - Marxian
One of the saintly father figures of the communist ideology is the 18 Century German Philosopher name Karl Marx. His communist doctrine (one call Les Capital) was feverishly followed by most Communist countries at the time. Marx thought that Capitalism is one of the most advanced human existence in the world, yet, the ultimately human ideology will be the communist. He once famously wrote that: Capitalism will be eventually substituted by worldwide socialism and commnunism.
Karl Marx considered capitalism to be a historically specific mode of production (the way in which the productive property is owned and controlled, combined with the corresponding social relations between individuals based on their connection with the process of production) in which capital has become the dominant mode of production.[20] The capitalist stage of development or "bourgeois society," for Marx, represented the most advanced form of social organization to date, but he also thought that in the near future it would be substituted by worldwide socialism and communism.
The modern rivalry
Democratic capitalism and communism were rival Western / European styles of political economy in the Cold War. This ended in 1989 when the communist Soviet Union collapsed in the face of the greater economic strength of the US and its allies.
By early 21 Century, only a handful single party run communist country left on the plenty. The largest one is China.
However, 45 years after WWII, it is communism that was falling into catastrophic disintergration. Due to the worsening economic conditions, by 1990, most of East European blocks of the Communist government lost their power and replaced by capitalst or pro capital list. By 1991, the big brother, i.e. the Soviet Union was also falling. The reformist Goberchov was replaced by Boris Yelsin led Capitalist government.
At the time, communist were represented by two key states, Soviet Union and People’s Republic China, following by East European block of countries such as Hunagary, Poland, Czech etc. Asian countries such as Vietnam, North Korea, others such as Cuba.
The boom of capitalism
At same time, despite its inevitable ups and downs, the capitalist countries are thriving. It was led by the last remaining super power, USA. Follow by main power such as UK, EU, Japan and the newly joint capitalist Russia is also catching up fast.
After some major set backs such as the great depression, world war II and 1970 oil shock and great inflation, capitalist country restarted their economy train with the full speed. Japan lead the drive but hit the speed bump in early 1990s and slowed to a crawl ever since. Among the Western economies, led my Anglo-Saxo economy such as US and UK. It also enjoyed a relatively free ride until dot.com and 9/11.
"The state of our union is strong," said Clinton in 19/1/1999 in his seventh State of the Union address to Congress, noting that the United States is enjoying the "longest peacetime economic expansion in our history -- with nearly 18 million new jobs, wages rising at more than twice the rate of inflation, the highest home ownership in history, the smallest welfare rolls in 30 years, and the lowest peacetime unemployment since 1957."
Clinton observed that "for the first time in three decades, the budget is balanced." Predicting that the nation would have budget surpluses for the next 25 years.”
Despite the 1997 Asia crisis and 98 Russian default, it only created brief skirmish in US market. Dow did for 20% in 2nd half1998 but recovered quick by the year end. Greenspan was saying:
The major reason for the ralatively long and buyount growth in economy can be attributed to Regan/Margaret era in early 80s. Their free market policy approach created a prolonged prosperous period however, it was said also soiled the seeds for the latest credit freeze crisis.
the Western economy have relatively minor hiccups since the early eighties.
By early 21th Century, it’s estimated 55% world GDP is concerntrated in advanced
capitalist countries.
One of the main characters in the history of the capitalism is its cyclical boom and bust phenomenon. Traditionally, the economy would sustain a long period of strong growth (the boom) then follow by a shorter period of recession (the bust). Generally, the recession was triggered by certain financial crisis.
Let’s have a look some more distinctive boom and burst cycle in the chapter of timeline.
The boom/bust characteristic of asset and credit markets leads to the cycle of greed and fear.
The real globalization: globalize banking regulatory framework/system.
Not to be outdone, Brown, in an Oct. 17 op-ed in the Washington Post, also called for a "new Bretton Woods." The same "sort of visionary internationalism is needed to resolve the crises and challenges of a different age. And the greatest of global challenges demands of us the boldest global cooperation," he wrote.
Brown declared the old postwar financial institutions "out of date" and in need of rebuilding to deal with a "wholly new era in which there is global, not national, competition and open, not closed economies." He reiterated calls for cross-border supervision of financial institutions, shared global accounting standards, "more responsible" executive pay and a role for international institutions to serve as an early-warning system.
The typical sequence of boom and bust has an asymmetric shape. The boom develops slowly and accelerates gradually. The bust, when it occurs, tends to be short and sharp.[i]
2008: The global economic discontent: marks the rejection of the flawed ideology that unregulated global financial markets promote financial innovation, market efficiency, unhampered growth and endless prosperity while mitigating risk by spreading it system wide.
1 Speech by Mr. George Soros at CICC Forum, November 21, 2008
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