Many countries have economic crises, such as USA, Spain, etc.. everything is settled afterwards.

Unfortunately we do not have a better model than capitalism at this point. All other systems have failed not because of the problems with them but because of the way they were implemented and the people at the helm of affairs. But in the last 20 years capitalism is going in the wrong direction of making rich richer and the poor poorer. Particularly with the recent recession most of the policies and bailouts were given to the rich and not the poor. If this continues we may be in trouble for global unrest.

capitalism is not without faults... however it is also unfair to say it is the cause of all evils and inequality world over..there is a lot to be said for the rich remaining rich. when the rich invest in or buy ultra luxury goods it helps the companies invest more in getting better and safer products.. research needs investment and that cost can not be met by low cost goods and technology.. still, what is paid for by the rich eventually gets incorporated into daily use goods for everyone else..

eg. the extensive technology that is used by Mercedes Benz, paid for essentially by the ultra rich and yet helped make motoring safer overall... there are examples in every industry if we look. the rich do make things more affordable to the rest in their own way.. so instead of worrying about how they get richer, what will it be like to examine why the poor remain so ... is there really a reverse relation between the money the rich and the poor have.. or something else???

Probably the globalization has not reached its capacity, there still exist countries with low wages, thus pushing down wages to developed countries and making a chain reaction of decreasing living standards. When this process will be finished and when we will not be able to find cheap workers, then we will discuss seriously about many -isms.

Very well said C. Lewis Kausel. That unfortunately is the truth.

Dear @Sylantyev, Unfortunately, the system does not help the people in need; it serves the rich people to become richer.

From simple observations, the working habits of what is named capitalism lead the system ( the total energy which enables to sustain it ) to get back to what it was in the past, a lower position from what it is. It seems therefore that it grows in a sinusoidal or a going up and down helix manner. When it reaches to the lowest point ( only the wealthy remains the active elements of the system while the majority become powerless with zero energy contribution to the continuity of the system ), it causes social upheavals, chaos and instability. These are what we observed in history. In order to avoid such behaviors, society should indeed develop better mechanisms and principles to avoid such periodic behaviors, so that members that contribute to the system should indeed increase in numbers than otherwise.

I attach my take on this issue which was posted in RG some time : http://dejalanalysis.blogspot.com/2014/04/economic-collapse-black-hole-syndrome.html

http://magazineesan.blogspot.com/

I really wonder why threads about -isms are so popular, even after the collapse of the biggest -ism project, ie the communist one. I think that instead of -isms we should aggregate actions in a different way, which, by the way, I have not yet found!

The old capitalist colonial system ended in the 1960's and the new US led globalization capitalist colonialism began and accelerated from the 1980's. Whatever revolts or crisis in the colonies never changed the old colonianist powers. Only revolts and crisis in the political centers matters. In the new US lead globalisation colonianist, only the crisis and the political revolution at the core of the empire , in the US can change the nature of this new type of capitalist.

Every now and then, there is announced that capitalism is dead or in crisis, but every time it comes out in a new guise. the old capitalists were known to be mediocre consumer now they have turned into largest consumer of goods and services. Any economy that is based on human thought cannot comprehend entirely human nature, therefore, either it does not consider incentive of private property as booster of economy or it overemphasises it to much, economy becomes exclusive and a few are benefited and a large population always lives in the state of perpetual misery. These mighty few whenever crisis is faced change their ways. I read several times whenever there was crisis, the sale of Das Kapital goes up, why not people consult Qura'an and Islamic economic system as enshrined in the Book to to solve their problems. To make money a commodity is the biggest folly of the capitalist system.

Mohammad,

The last 1998 crisis that was triggered by the speculative real estate practices in the US could easily be overcome by the US because they can print money. Contrary to all other country, when they print money, it does not result in inflation for them since they own the international currency. So the chineeses, and every body is paying for the printed money and it is the Greeks , the Spanishs who cannot printed money that have to pay the bills.

Primary principles of capitalism taught in my Economics courses:

(1) Own all the resources (e.g., natural, political, the media) and

(2) Profit from artificially- and naturally-created differentials (e.g., labor, scarcity, war, etc.).

With now a global economy, these principles may be upheld in perpetuity for those few through the creation of catastrophe here, while profiting there (differentials), the degree of polarity of which may only be countered by democratic principles:

(1) Free speech for all and

(2) Majority (overwhelmingly united) rule (e.g., voting independents, including the judiciary; boycott; self-reliance; defense).

It just finds new ways to make profits, e.g. stealing indigenous knowledge about agricultural species and medicines, and then holding them in patent under intellectual property rights. Invading the commons and privatizing it, as the move to reject water as a human right. Soon they will be charging for the air we breathe.

I have my doubts about what my friend Mahfuz says. In the short term it is true, no doubt. By in the middle and long term is seems clear that the crisis is deepening, and the various crises get much more intertwined and depending from each other. Economics must have the capacity to enlarge its scope with history and, more exaclty, with history as longue durée. The current crises began in the early 1990s, and it's been worsening, it appears.

Louis,

I remember those days the US assured vehemently that Chinese money is secure as though some mythical serpent is guarding their treasure (analogy from a short story of Tagore).

@Maria,

Unfortunately, capitalism place much importance on individualism rather than community or humanity. Individualism results in cutthroat competition wherein big fish sallow up small fish resulting in few big fish and non-fish organism.

I think that capital is a human feature. Human need to consume, to produce, to exchange, to buy, to earn..etc...it is a natural behavior of all human. However how a feasible capitalist model could be more suitable to justice and development issues, is a more related question of power and power ship. Generally, history shows us in different societies and different ages, that who have more money (or the rich) have the power of organizing the societies and may be the world when it is related to powerful nations. In most cases the rich are more interested by their own private interests in growing, becoming more powerful or influencing and making more money and saving (storing) it into crisis.

So if some rich people (not all of them), need more power, they could organize a social slavery scheme. So if major people become poor, they could fall automatically under their dictate. So the question is not connected with an economic model but the relations ships between rich, money and power.

The primary reason, in my opinion, is due to the orientation of capitalism: private profit. Is private profit bad? Look at the employment it generates; the affluence to stake (stock) holders; revenue to government, etc. With all these 'benefits' capitalism is definitely attractive. The hidden problems are that the huge income to the government indirectly gets recycled to cater to the needs of the 'haves' and trickles downs to the 'havenots' only in the form of doles - social security, public health, unemployment insurance, old age grants, etc. As we look at capitalistic economies, we find that year by year, each of these doles are becoming huge controversies and the poorer sections of the population in developed countries are increasingly getting adversely affected. See the debate on public health funding issue in USA for example.

Economic prosperity as the answer to all developmental needs is the fundamental approach of capitalism. It apparently recognises other issues like social development /protection of natural environment only as incidental. An example of this is the current craze for CSR initiatives. While making bold statements about CSR, industries continue to exploit/damage the environment producing irreversible loss to environment/ecological aspects that sustain millions of people. Governments in less developed or under-developed countries, without realising the long term danger to the lives of local communities, adopt development models from developed countries propagating the damage that has spread to alarming dimensions.

The above is only an example of how capitalism dithers. While by itself it is not a 'bad' concept, I am of the opinion that societies and governments must adopt a calibrated and well-deliberated approach to derive the best benefits of capitalism for larger number of population, in other words - sustainable development. Other wise, as Sylantyev's question suggests, capitalism will continue to be at the cross roads BECAUSE it will keep producing economic crises. Like the old proverb says - those who live by the sword...will get nicked at-least once in a while!!

I am a bit late with an answer! Sorry if I have missed something important. I have found the paper which explains, which gives "16 Signs That The Rich Are Getting Richer And The Poor Are Getting Poorer". Good reading! This is the case from USA, but it happens in my country also!

http://endoftheamericandream.com/archives/16-signs-that-the-rich-are-getting-richer-and-the-poor-are-getting-poorer

Charles S. Peirce, Evolutionary Love

Published in The Monist, vol. 3, pp. 176-200 (1893)

http://www.cspeirce.com/menu/library/bycsp/evolove/evolove.htm

''Here, then, is the issue. The gospel of Christ says that progress comes from every individual merging his individuality in sympathy with his neighbors. On the other side, the conviction of the nineteenth century is that progress takes place by virtue of every individual's striving for himself with all his might and trampling his neighbor under foot whenever he gets a chance to do so. This may accurately be called the Gospel of Greed.''

I think that after earlier economic crisis capitalism really changed the direction. Remember, for example, 1929-1933 economic crisis - the New Deal in the USA and the Socialdemocratic power in Sweden beginning from 1932 symbolized the coming Keynsianism and Welfare era after the war. The economic difficulties of seventies-eghties marked a beginning of a neo-liberal era, even libertarianism. But after the recent crisis really is nothing changing. Only theoretical propositions of New Governance, but nobody wants to implement it in practise in broader scale. Especially in Eastern Europe, like Baltic states where economic indicators are improving after crisis in a faster way. I do not know why the people after recent crisis do not want to overlook their values, attitudes and understanding. From the other side there are.evident new values and understanding among young people, who have little in common with the older generations. May be, the time is necessary for the new directions - older are in exhaustion and tiredness, but new ones not yet on the scene.

I may be wrong, however my understanding of the cause of latest cycle of depression was that people failed the system. Taking multiple loans on properties with each loan or finance causing the illusion of greater market need and therefore a rise in prices while the actual value did not exist. This caused a ripple effect and when finally the bubble burst every sector of the economy was affected.

Greed was really the cause and lack of appropriate checkpoints. On an average day any banker /financier/economist for that matter anyone can foresee a problem in a similar situation.

The system needs repair to prevent its manipulation by people running it and definitely greater accountability.