Essay Example on The theoretical idea of capitalism and its intimidating imprint on Society









The theoretical idea of capitalism and its intimidating imprint on society has long discoursed throughout the era Wolfgang Streeck however worked on producing a very unconventional perspective on this controversial topic with a radical masterpiece called Buying Time 2014 This fundamental yet divergent book confers the continuous process of rich capitalist countries trying to gain more time and postponing one crisis to the next By buying time Streeck refers the idea of controlling the social conflicts utilizing pecuniary tools such as inflation financial and investment debt Streeck 2014 He talked about how the capitalism and the dimension of crisis changed their course over time and space throughout last 4 decades The crisis discussed in the book evolves from strike upsurge of the 1960s to fiscal crisis of Mediterranean countries from 2008 onwards The concluding attention leading towards the Eurozone crisis and the possible resolution of the crisis This paper will address the deep seated proposals of Streeck and his vision to the impending Eurozone crisis As per Streeck there are only two opportunities left to liberate the Eurozone from the ongoing crisis One is the dissolving of the eurozone and going back to own currencies As the devaluation of euro within the Eurozone countries as a tool to participate in equal competition is not present 

The other option proposes is much more radical Reformation of Eurozone and moving towards a Bretton wood system Streeck 2014 pp Throughout the paper these two options and the possibilities will be discussed Both approaches are equally radical and transformative The first part of the paper will focus on the transformation of capitalism and crisis throughout times according to the book To understand the recent crisis it is imperative to fathom the trend of the crisis through time How one dimension of crisis leads to another and at the same time interlinked The attempts made by capitalist countries to resolve the crisis temporary only to face the next one will be discussed according to Buying Time will also be discussed The following part will discuss changes in capitalist regimes How States shifted from tax generating governments to debt trapped government and finally moved to a consolidation state named European Union And the Eurozone as an example of consolidation state the concluding part will discuss the two projected solutions proposed by Streeck At the same time some other analysis from contemporary studies will be discussed to measure out the validation of Streeck s solutions If dissolution or transformation of the eurozone fundamentally valid on a logical level or it is too costly for the countries as well as for the European institutions Is getting out of Eurozone an option to consider for the countries to dissolve crisis

The Forms of Crisis Through Time Streeck begins the book by introducing a three-fold crisis that materialised in rich capitalist countries in last four decades The first being the Banking crisis also known as secondary banking crisis which started from American finance sector crisis When the banks started lending stretched credits to public and private sectors Loans on assets with a lower value than the loans given eventually lead them to become a debtor Credits went bad This created distrust among banks lending to each other Customers lost their confidence in the banking sectors Then the Government central bank came to the rescue bailing out the banks from their default This scenario leads to the next form of crisis stated as a fiscal crisis Tax redemption on wealthy bailing out the state banks created budget deficit across states Spending on social structural and public welfare became hard States opted out for borrowing from other resources thus creating state debt as result This generated panic and distrust among investors and financial market To assure the ongoing panic states begin to put austerities on the general citizen with higher tax and lower social benefit 

As a result the real economy crisis began as state fiscal crisis also put a hold on the liquidity of economy in the market A nationwide stagnation evolved with lack of confidence from investors to roll the money into the debt skulked country Unemployment issue rose as state austerity bound the banking credit system to finance private sectors Streeck 2014 These interlinked crises have been creating economic stagnation in the rich capitalist countries While the banking crisis linked with fiscal crisis directly through monetary terms its relation to the real economy crisis is in terms of credit On the other hand fiscal crisis and the real economy crisis is related to government spending and revenue issue Streeck 2014 Streeck recommended the crisis in the economy is not only about monetary gain or stagnation It is also about power authority and legitimization of investment interest Streeck 2014 Unlike other crisis theories he proposes a new perspective on capitalism crisis He notes the late capitalism is not a crisis as a political actor rather the crisis with capitalism is its legitimization in social and cultural authority Economic Crisis in capitalism occurs when capitalist loses confidence on market and they get reluctant to invest Discontent with democracy and associated obligations of democracy such as workers access demand collective bargaining and trade union makes capitalist withdraw from a certain economic society

As per Streeck economic crisis starts when the capitalist goes on investment strike which results in low growth and unemployment in the society Streeck 2014 He proposed the capital needs to have more focused in a new light The legitimation crisis of capitalist economy through democratic policies became a never-ending conflict The intervention and obligations of war-torn democratic politics pushed the capitalist economy to move from political grasp to free-market concept Which Streeck outlines in the last part of the book as consolidation state As he mentions This splitting of democracy from capitalism through the splitting of the economy from democracy Streeck 2014 pp

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