Renewed Questions About Capitalism and the Laissez Faire Economic Model

The US mortgage crisis seriously challenged the idea of ​​a free-run [free market] economy. What was once considered the most sound and progressive economic model is now suffering from a crisis of trust. No one seems to have an answer.

In short, the free market economic model shows that the government should not interfere with or be involved in any economic activity. At the other end is the communist economy where the government owns, manages and manages all economic activities. The important thing is that no country is completely capitalist or communist. Most countries are mixed economies, defined as capitalism or communism, depending on which one is inclined.

In the early 1990s, the World Bank and the International Monetary Fund [IMF] are a series of structural adjustment programs [SAPs] designed to help the Third World economy promote and promote economic growth. Devised a program of poverty.

The main purposes of these programs are:

o The third world economy was to liberalize the economy. In other words, selling national assets and companies to the private sector. In other words, the government was asked to reduce its involvement in economic activities and become a free market economy.
o Reduce public spending, primarily by reducing the government-paid workforce. The Third World Government was forced to significantly reduce its workforce. They also called for reducing spending on healthcare and education by eliminating subsidies in these areas. In short, they were to require residents to pay for these services.

To ensure that the Third World Government is committed to these programs. Aid, grants, and financing showed how successful the government was in implementing these programs. The United States and Europe subsequently linked their financial support to their commitment to SAP.

The argument at that time was that the free market economic model was the only route to economic prosperity. Given that China's GDP has grown by an average of 9.9 percent annually since 1978, it is now well understood. China's per capita income has grown at an average annual rate of over 8% over the past 30 years, dramatically reducing poverty. It is almost unanimous among economists that SAP is currently destroying the third world economy. In fact, most countries have completely abandoned them.

What is happening in the United States and today in Europe is an example of a runaway, unconstrained, unregulated capitalism. The US $ 700 billion bailout plan recently passed by Congress is a slap in the face of what was once a sound economic policy. Events in the US and Europe should serve as a call to all people. The best economic model is not necessarily a model that is not a free handoff “handoff”, but a balance between the capitalist model and the communist model. It seems that China is making good progress. Clearly it is dangerous that one side is too far away.