Analyzing capitalism theories: Strange, Polanyi, and Arrighi compared

¶ … Nature of Capitalism

Susan Strange's theories of capitalism

Giovanni Arrighi's theories 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). . 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).

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 benefits associated with democracy and not of capitalism at all. Capitalism is flawed sue to the fact that it wants the global economy to be a function of the market forces. The fact that it proposes that the market be the deciding factor on everything is the main reason for the flaw. The market itself is hard to define. A look at the unpredictability and volatility of the stock market is an example of how unpredictable and unreliable the concept of 'Markets' can be. Therefore, the works of Susan Strange, Karl Polanyi and Giovanni Arrighi clearly indicates that capitalism is not a good system and should be abolished altogether. This is due to the injustices and crises that are part and parcel of the capitalistic global marketplace.

Contrasting the works of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism

While contrasting the works of Susan Strange, Karl Polanyi and Giovanni Arrighi on capitalism, it is easy to notice that Susan Strange mainly focused on the mechanisms and development of Casino capitalism from industrial capitalism.Arrighi's work makes a prediction of the future of capitalism. Karl Polanyi on the other hand concentrated on the analysis of the markets pre and post-capitalism. He looked at the concept of free markets and free goods as well as their subsequent destruction by the concept of capitalism.

Conclusion

Capitalism is therefore a concept which has created several crises in our contemporary society. It is therefore necessary for world governments to come up with policies that put in check the negative attributes of capitalism which at the same time would encourage fair participation and competition.