Capitalism, an economic which has dominated the Western world after the catastrophic failure of feudalism (Encyclopedia Britannica,2006). No consensus exists for an accurate definition of the term as well as how the term has been employed as a historical category (Rowman & Littlefield, 1999, p.1). . In this paper however, we analyze and define the capitalism while also comparing as well as contrasting the theories of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism. We also explain how the three of them handled the issues of capitalism.
Capitalism, an economic which has dominated the Western world after the catastrophic failure of feudalism (Encyclopedia Britannica,2006). No consensus exists for an accurate definition of the term as well as how the term has been employed as a historical category (Rowman & Littlefield, 1999, p.1).However, a general agreement exists that capitalism has elements of private ownership as an important method of production, accumulation of capital, creation of various goods and services, wage labor as well as participation in voluntary exchange (Heilbroner,2008; Tormey,2004). The term capitalism has often been used in various historical contexts all of which vary with geography, time, culture as well as politics (Scott,1995).The analysis of capitalism has been approached in various perspectives by historians, economists as well as political economists. Economists have been noted to make an emphasis on the degree to which the government has no control over the existing and emerging markets (laissez faire) as well as over rights to property (Tucker,1997;Case,2004).Political economists on the other hand have an emphasis on the power relations, class, wage labor, private property as well as the historical formulation of capitalism (Stilwell,2002).Generally, capitalism has been observed as a concept that encourages economic growth (Encyclopaedia Britannica, 2009).Several political ideologies have been advanced in support of various cases of capitalism with economic liberalism being the most dominant. In this paper however, we analyze and define the capitalism while also comparing as well as contrasting the theories of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism. We also explain how the three of them handled the issues of capitalism.
The definition and nature of capitalism
Capitalism is a concept which is usually defined as an economic system that involves private actors who are given permission to own as well as control the usage of property in accordance to their own interests under the influence of the invisible hand of demand and supply which controls the pricing mechanism in the markets for the sake of our society (Scott,2006).In a capitalistic system, the government is responsible for the maintenance of peace as well as justice. Capitalism is also defined as a system that is fueled by indirect governance of the eco9nomic relationships in which all the markets exist within the institutional frameworks that are put in pca by the dominant political authorities (governments). Capitalism is noted by Scott (2006) to be a three level system. The first level is occupied by the markets and is marked by stiff competition between the actors. The second level is dominated by the institutional foundations that govern these markets.The third level is occupied by the political authority that govern these markets. Even though markets with the assistance of the invisible hand play a role in the coordination of the forces of demand and supply, the government is noted by Scott (2006) to play a role in the coordination of the modernization of the market frameworks according to the changing nature of market conditions.
Susan Strange's theories of capitalism
Susan Strange was a very astute British academic who became very influential in the International Political Economy arena. One of her most influential publications within the context of capitalism is Casino Capitalism (Strange,1997).
What is Casino Capitalism?
Casino capitalism is a term which was coined by Strange (1986) and became the titled of her book called Casino Capitalism which was published in 1986. Casino capitalism in essence refers to an economic system which is built on the basis of a belief that the resources of our society are best allocated by individuals and corporations who are profit-seeking and betting on the movements of the short-term prices of paper assets as well as intangible assets.
The concept of Casino Capitalism is aimed at the creation of an infinite amount of assets (paper assets) that can effectively be traded between the concerned and participating individuals and corporations.
The theory of Casino Capitalism is pegged on the notion that the respective prices of these paper assets due to the fact that they are set by the various profit-seeking individuals as well as corporations (that is, the market being a representative of the actual image of the society's needs and can therefore be effectively be used in the determination of the nation's economic policy).casino capitalism can be best contracted to Productive Capitalism which is based on the belief that the resources of our society are better to be allocated to various profit-seeking individuals who are attempting to make available the long-term as well as "valuable" products as well as services to our society.
The U.S. is noted by Sallaz (2009) to be dominated by cases of Casino Capitalism and the nation is noted to be increasingly being transformed into a fully conditioned Casino Capitalism state.
Strange (1989) was one of the very first people to realize that financial and monetary factors marks the root of all the global economic disorders. The disorders are by no means accidental but in reality are as a consequence of a series of government decisions (Strange,1989,p.60).
According to the work of Strange (1989,p.9-10), the transformation from industrial capitalism to casino capitalism is as a consequence of five main trends. These trends are noted to result into an increase in the level of systemic instability as well as an increase in the level of political corruption. These trends are;
Innovations in the mechanism of operation of the financial markets
The size of the markets
Commercial banks converted into investment banks
The emergence of the Asian nations as important players
The shift by banks into self-regulation.
Giovanni Arrighi's theories of capitalism
Giovanni Arrighi was a great political scholar who was a true believer in Marxism. His work explored capitalist trajectory as well as crisis in the capitalist global ecology. His work indicated that the history of the concept of capitalism indicates that the periodic reemergence of crisis is never a function of the strength of the working class or the combativity of the mistakes in then global economic management or even the existence of parasitism in our society but is undeniably linked to the presence as well as existence of the concept of capitalism itself (Arrighi,1978,p.3).
His work poignantly explored the crises that are caused by capitalism and their association with capital accumulation, concentration of capital, labor conflict, economic policy, world market as well as under-development.Arrighi (2000) is also noted to have contributed immensely to the cyclic theories of capitalism. He noted that in cases of transnational networks of production in the global markets circuit amidst the global structures of capitalistic rule, there is the inevitability of rupture.
A comparison of the works of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism.
A comparison of the works of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism reveals that they all believed that the concept of capitalism is flawed. Strange noted that casino capitalism is an economic system which is completely flawed with nea zero benefits to the society. Giovanni Arrighi on the other hand noted that the concept of capitalism goes hand in hand with crises in the global economic and financial system. It is worth noting that the alleged benefits of capitalism to the United States are in reality as a consequence of the…