Imp Essay Topics

1. Small State, Happy State

2. Food Security | Direct Subsidy as Panacea of all problems
3. Male child bias - female infanticide - Skewed sex ratio in Census 2011 | Woman
Empowerment <<<<<<<<
4. Corruption/Blackmoney/Underground economy/Ethics in India
5. Civil Society Activism<<<<<<<
6. Indias Global role
7. WTO and India
8. Freedom of Expression in India (MF Hussain)<<<<<<<<<
9. Shift of Power from West to East
10. Indias Energy Security
11. Mans arrogance and Natures Fury (Japans diaster)
12. The Great Indian Land Grab
13. Neo-Liberalism in India
14. Multi-Culturalism<<<<<<<<<<<<<
15. role of social media - revolutions (Arab Spring)
MOST IMPORTANT TOPICS
1. Global war on terror
2. Multiculturalism
3. End of Capitalism
4. Civil Society activism
5. Role of social media in bringing revolutions
6. Freedom of expression in India eg. Mf hussain, aarakshan
=============================================

Multi-Culturalism
Definition:
Multiculturalism is the appreciation, acceptance or promotion of multiple cultures, applied to the
demographic make-up of a specific place, usually at the organizational level, e.g. schools,businesses,
neighborhoods, cities or nations.
In a political context it has come to mean the advocacy of extending equitable status to distinct ethnic and
religious groups without promoting any specific ethnic, religious, and/or cultural community values as
central.
Multiculturalism as "cultural mosaic" is often contrasted with the concepts assimilationism and social
integration and has been described as a "salad bowl" rather than a "melting pot. ( The idea of the Melting
pot is a metaphor that implies that all the immigrant cultures are mixed and amalgamated without state
intervention.)

History:
Historically, support for modern multiculturalism stems from the changes in Western societies after World
War II, in what Susanne Wessendorf calls the "human rights revolution", in which the horrors of
institutionalized racism and ethnic cleansing became almost impossible to ignore in the wake of
theHolocaust; with the collapse of the European colonial system, as colonized nations in Africa and
Asiasuccessfully fought for their independence and pointed out the racist underpinnings of the colonial
system; and, in the United States in particular, with the rise of the Civil Rights Movement, which criticized
ideals of assimilation that often led to prejudices against those who did not act according to AngloAmerican standards and which led to the development of academic ethnic studies programs as a way to
counteract the neglect of contributions by racial minorities in classrooms. As this history shows,
multiculturalism in Western countries was seen as a useful set of strategies to combat racism, to protect
minority communities of all types, and to undo policies that had prevented minorities from having full
access to the opportunities for freedom and equality promised by the liberalism that has been the
hallmark of Western societies since the Age of Enlightenment.

Why is it needed ?
C. James Trotman argues that multiculturalism is valuable because it "uses several disciplines to highlight
neglected aspects of our social history, particularly the histories of women and minorities [...and]
promotes respect for the dignity of the lives and voices of the forgotten. By closing gaps, by raising
consciousness about the past, multiculturalism tries to restore a sense of wholeness in apostmodern era
that fragments human life and thought."

Critics
Critics of multiculturalism often debate whether the multicultural ideal of benignly co-existing cultures
that interrelate and influence one another, and yet remain distinct, is sustainable, paradoxical or even
desirable. It is argued that Nation states, who would previously have been synonymous with a distinctive
cultural identity of their own, lose out to enforced multiculturalism and that this ultimately erodes the host
nations' distinct culture.

Multiculturalism in India:
The culture of India has been shaped by its long history, unique geography and diverse demography.
India's languages, religions,dance, music, architecture and customs differ from place to place within the
country, but nevertheless possess a commonality. The culture of India is an amalgamation of these
diverse sub-culturess pread all over the Indian subcontinent and traditions that are several millennia old.
The Indian caste system describes the social stratification and social restrictions in the Indian
subcontinent, in which social classes are defined by thousands ofendogamous hereditary groups, often
termed as jtis or castes.
The term multiculturalism is not much used in India, except in the recent times by the left-liberals and the
communists. The termdiversity (within the Indian culture) is the term which is used by the Indians more
often.
Religiously, the Hindus form the majority, followed by the Muslims. The actual statistics are:
Hindu(80.5%), Muslim (13.4%, including both Shia and Sunni), Christian (2.3%), Sikh (2.1%),
Buddhist,Bah', Jain, Jew and Parsi populations. Linguistically, the two main language families in India
are Indo-Aryan (a branch of Indo-European) and Dravidian. India officially follows a three-language
policy.Hindi is the federal official language, English has the federal status of associate/subsidiary official
language and each state has its own state official language (in the Hindi sprachraum, this reduces to
bilingualism). The Republic of India's state boundaries are largely drawn based on linguistic groups; this
decision led to the preservation and continuation of local ethno-linguistic sub-cultures, except for the Hindi
sprachraum which is itself divided into many states. Thus, most states differ from one another in
language, culture, cuisine, clothing, literary style, architecture, music and festivities.
Occasionally, however, India has encountered religiously motivated violence, such as the Moplah Riots,
the Bombay riots, the 1984 anti-Sikh riots and 2002 Gujarat riots.

Recent Examples of violations in Europe:

The United Kingdom'sPrime Minister David Cameron, German Chancellor Angela Merkel,Australia's exprime minister John Howard, Spanish ex-premier Jose Maria Aznar and French President Nicolas
Sarkozy have voiced concerns about the effectiveness of their multicultural policies for integrating
immigrants.
Recent European/US Examples of Islamophobia:
1. The controversy surrounding the niqab and hijab these Islamic symbols being viewed as an attack on western
civilization or identity is still fresh in the mind. In addition to this, Merkels statements to the youth wing of her
Christian Democratic Union party, in which she said that multiculturalism has completely failed in Germany, still
resonates in the minds of many people who are following the controversy that was raised over the issue of Muslim
immigration into Germany, particularly from Turkey.
2. Switzerlands ban on minarets, and France and Belgiums ban on the niqab.
3. Quran burning by a fundamentalist Christian preacher.
4. Killing spree by a Norwegian Right winger.

Additional Sources: http://plato.stanford.edu/entries/multiculturalism/ http://www.indiaseminar.com/1999/484/484%20parekh.htm

Indias Global Role

features
7th on land
2nd on population
3rd ina rmy
4th in PPP
worlds largest democracy
free press
proactive judiciary
uniqueness
potential to lift millions out of poverty in one generation along with free press,
pluralisma nd vibrant democracy
can achieve inclusive growth
no territorial aimbitions
panchsheel guidelines
enormous soft power

bollywood

art

diaspora

cuisine
P5 leaders visited India in 2010
short comings in becoming a global power
population

envmnt degradation

lack of land for farming

poverty
low quality education
119 on HDI
infrastructure

roads, rail, ports

lack of R&D
resource scarcity

80% oil imported

a neighbourhood of 6 failed states
advatages
well equipped to leverage IT for incrsng effectiveness and efficiency
large young population
frugal innovations
most entrepenuerial society by 2025

culture of individualism

engine of growth
non alignment policy
why?

nehru's distaste for power blocks

inspiration from gandhi's non vilent struggle

India charts its own independent foreign policy
US misread India's policy and took advatage of boundary problems and forced
India to align with USSR
since 1991 multi alignment
new foreign policy since 1991
now a potential economic super power
political counterweight to china
indian industrial houses hare become global majors

L N mittal

tata takeover of jagaur

airtel in africa
foreign policy priorities

external security

internal security

sustained economic growth

energy security

maritime security
India is too large a country to be dovetailed into any alliance
aims to promote prosperous and secure neighbourhood

asymmetric responsibilities under SAARC

FTA with lanka

duty free imports frm bangladesh, nepal, bhutan

India US relation
till 1991 frosty relations

perceived leaning towards USSR

non alignment

US relation with pakistan

now strategic partners
nuclear accord

End of Capitalism
Communism forgets that life is individual. Capitalism forgets that life is social, and the kingdom
of brotherhood is found neither in the thesis of communism nor the antithesis of capitalism but in
a higher synthesis. It is found in a higher synthesis that combines the truths of both. Now, when
I say question the whole society, it means ultimately coming to see that the problem of racism,
the problem of exploitation, and the problem of war are all tied together. These are the triple
evils that are interrelated. Martin Luther King Jr
Capitalism is an economic system in which the means of production are privately owned and operated
for profit, usually in competitive markets.

History of Capitalism:
PREHISTORY OF CAPITALISM
According to some historians, the modern capitalist system has its origin in the "crisis of the fourteenth
century," a conflict between the land-owning aristocracy and the agricultural producers,
the serfs. Manorial arrangements inhibited the development of capitalism in a number of ways. Because
serfs were forced to produce for lords, they had no interest in technological innovation; because serfs
produced to sustain their own families, they had no interest in co-operating with one another. Because
lords owned the land, they relied on force to guarantee that they were provided with sufficient food.
Because lords were not producing to sell on the market, there was no competitive pressure for them to
innovate. Finally, because lords expanded their power and wealth through military means, they spent their
wealth on military equipment or on conspicuous consumption that helped foster alliances with other lords;
they had no incentive to invest in developing new productive technologies.
This arrangement was shaken by the demographic crisis of the 14th century. This crisis had several
causes: agricultural productivity reached its technological limitations and stopped growing; bad weather
led to the Great Famine of 13151317; the Black Death in 13481350 led to a population crash. These
factors led to a decline in agricultural production. In response feudal lords sought to expand agricultural
production by expanding their domains through warfare; they therefore demanded more tribute from their
serfs to pay for military expenses. In England, many serfs rebelled. Some moved to towns, some
purchased land, and some entered into favorable contracts to rent lands, from lords desperate to
repopulate their estates.
The collapse of the manorial system in England created a class of tenant-farmers with more freedom to
market their goods and thus more incentive to invest in new technologies. Lords who did not want to rely
on rents could buy out or evict tenant farmers, but then had to hire free-labor to work their estates giving
them an incentive in investing in production.[6] This process was encouraged by the enclosure
movement, which transferred public lands to large landowners, who used the land to graze sheep rather
than produce food. As Englands wool exports grew in the 15th century, the process of enclosure
accelerated, forcing many tenant-farmers to give up farming and seek wage-labor.[7]According to Karl
Marx, the rise of the contractual relationship is inextricably bound to the end of the obligatory relationship
between serfs and lords. Marx characterizes this transformation as the historical process of divorcing the

producer from the means of production.[8] It was this divorcing that turned the serfs land into the lords
capital.
According to Marx, this rearrangement led to a new division of classes:
two very different kinds of commodity owners; on the one hand, the owners of money, means of
production, means of subsistence, who are eager to valorize the sum of value they have
appropriated by buying the labour power of others; on the other hand, free workers, the sellers of
their own labor-power, and therefore the sellers of labour. Free workers, in the double sense that
they neither form part of the means of production themselves nor do they own the means of
production that transformed land and even money into what we now call capital. [9]
Marx labeled this period the "pre-history of capitalism". [8]
It was, in effect, feudalism that began to lay some of the foundations necessary for the development
of mercantilism, a precursor to capitalism. Feudalism took place mostly in Europe and lasted from the
medieval period up through the 16th century. Feudal manors were almost entirely self-sufficient, and
therefore limited the role of the market. This stifled the growth of capitalism. However, the relatively
sudden emergence of new technologies and discoveries, particularly in the industries of
agriculture[10] and exploration, revitalized the growth of capitalism. The most important development at
the end of Feudalism was the emergence of the dichotomy between wage earners and capitalist
merchants.[11] With mercantilism, the competitive nature means there are always winners and losers,
and this is clearly evident as feudalism transitions into mercantilism.

MERCHANTILISM
The earliest recorded activity of long-distance profit-seeking merchants can be traced back to the Old
Assyrian merchants active in the 2nd millennium BC.[12] The Roman Empire developed more advanced
forms of Merchant capitalism, and similarly widespread networks existed in Islamic capitalism, but the
modern form took shape in Europe in the late Middle Ages and Renaissance. Some scholars, Rodney
Stark particularly, trace the origins to medieval Italian and French monastic estates.
There is a separate but also related tradition of the emergence of commerce and capitalism related to
monastic estates in Italy and France and later the independent city republics of Italy during the late Middle
Ages and into the early modern period. Innovations in banking, insurance, accountancy, and various
production and commercial practices linked closely to a 'spirit' of frugality, reinvestment, and city life and
promoted attitudes which sociologists have tended to associate only with northern Europe, Protestantism
and a much later age. The city republics maintained their political independence from Empire and Church,
traded with north Africa, the middle East and Asia, and introduced Eastern practices as well as innovated
substantially, producing many links between of culture and commerce. They were also considerably
different from the absolutist monarchies of Spain and France, and were strongly attached to civic liberty
and anti-monarchical republications.;[13][14];.[15]
Modern capitalism didn't arise until the early modern period, between the 16th and 18th centuries, when
merchant capitalism and mercantilism were established.[16][17] This period was associated with geographic
discoveries by merchant overseas traders, especially from England, Portugal, Spain and the Low
Countries; the European colonization of the Americas; and the rapid growth in overseas trade. Referring
to this period in the Communist Manifesto, Marx wrote:
The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie.
The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase
in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an
impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a
rapid development." [2]
Mercantilism was a system of trade for profit, although commodities were still largely produced by noncapitalist production methods.[3]Noting the various pre-capitalist features of mercantilism, Karl

Polanyi argued that "mercantilism, with all its tendency toward commercialization, never attacked the
safeguards which protected [the] two basic elements of production - labor and land - from becoming the
elements of commerce"; thus with mercantilism regulation was more akin to feudalism than capitalism.
According to Polanyi, "not until 1834 was a competitive labor market established in England, hence
industrial capitalism as a social system cannot be said to have existed before that date." [18]
Under mercantilism, European merchants, backed by state controls, subsidies, and monopolies, made
most of their profits from the buying and selling of goods. In the words of Francis Bacon, the purpose of
mercantilism was "the opening and well-balancing of trade; the cherishing of manufacturers; the
banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and
husbanding of the soil; the regulation of prices..." [19] Similar practices of economic regimentation had
begun earlier in the medieval towns. However, under mercantilism, given the contemporaneous rise of
the absolutism, the state superseded the local guilds as the regulator of the economy.
Among the major tenets of mercantilist theory was bullionism, a doctrine stressing the importance of
accumulating precious metals. Mercantilists argued that a state should export more goods than it
imported so that foreigners would have to pay the difference in precious metals. Mercantilists asserted
that only raw materials that could not be extracted at home should be imported; and promoted
government subsides, such as the granting of monopolies and protective tariffs, were necessary to
encourage home production of manufactured goods.
Proponents of mercantilism emphasized state power and overseas conquest as the principal aim of
economic policy. If a state could not supply its own raw materials, according to the mercantilists, it should
acquire colonies from which they could be extracted. Colonies constituted not only sources of supply for
raw materials but also markets for finished products. Because it was not in the interests of the state to
allow competition, to help the mercantilists, colonies should be prevented from engaging in manufacturing
and trading with foreign powers.
The British East India Company and the Dutch East India Company launched an era of large state
chartered trading companies.[1][20] These companies were characterized by their monopoly on trade,
granted by letters patents provided by the state. Recognized as chartered joint-stock companies by the
state, these companies enjoyed power, ranging from lawmaking, military, and treaty-making privileges.
[21]
Characterized by its colonial and expansionary powers by states, powerful nation-states sought to
accumulate precious metals, and military conflicts arose.[1] During this era, merchants, who had previously
traded on their own, invested capital in the East India Companies and other colonies, seeking a return on
investment.
LAISSEZ FAIRE
Mercantilism declined in Great Britain in the mid-18th century, when a new group of economic theorists,
led by Adam Smith, challenged fundamental mercantilist doctrines as the belief that the amount of the
world's wealth remained constant and that a state could only increase its wealth at the expense of
another state. However, in more undeveloped economies, such as Prussia and Russia, with their much
younger manufacturing bases, mercantilism continued to find favor after other states had turned to newer
doctrines.
The mid-18th century gave rise to industrial capitalism, made possible by the accumulation of vast
amounts of capital under the merchant phase of capitalism and its investment in machinery. Industrial
capitalism, which Marx dated from the last third of the 18th century, marked the development of the
factory system of manufacturing, characterized by a complex division of labor between and within work
process and the routinization of work tasks; and finally established the global domination of the capitalist
mode of production.
During the resulting Industrial Revolution, the industrialist replaced the merchant as a dominant actor in
the capitalist system and effected the decline of the traditional handicraft skills of artisans, guilds, and
journeymen. Also during this period, capitalism marked the transformation of relations between the British
landowning gentry and peasants, giving rise to the production of cash crops for the market rather than for
subsistence on a feudal manor. The surplus generated by the rise of commercial agriculture encouraged
increased mechanization of agriculture.

The rise of industrial capitalism was also associated with the decline of mercantilism. Mid- to late-19thcentury Britain is widely regarded as the classic case of laissez-faire capitalism.[16] Laissez-faire gained
favor over mercantilism in Britain in the 1840s with the repeal of the Corn Laws and the Navigation Acts.
In line with the teachings of the classical political economists, led by Adam Smith and David Ricardo,
Britain embraced liberalism, encouraging competition and the development of a market economy.

The capitalism of modernity

In 1899, the economy, still reliant on horse, wind and steam power, would still just have been
recognisable to a Greek or Roman; by 1929 the modern age had been launched. Over 30 years the
automobile, the aeroplane, the radio, the skyscraper, the ocean liner and a whole range of domestic
electrical appliances emerged as astonishing new artefacts. Modernity had been launched. Although
from 1914 Europe was to be mired in war and subsequent recession, Edwardian England shared in
the early growth, which culminated in America's Roaring Twenties. The dollar challenged sterling; the
European empires, led by the British, inexorably declined before the dazzling technological,
industrial and financial might of America.
Through the final decades of the 19th century, from the opening of the canal forward, the United Kingdom
slowly lost its pre-eminence in manufacturing and finance. There is a lot of debate about the reasons for
this; indeed, historian Paul Kennedy has called it "one of the most investigated issues in economic
history."
There were many elements, including the obsolescence of the personal management style,
confrontational labor relations, inadequate capital investment, and the rise of at least three competing
industrial giantsGermany, Japan, and the United States. There were also cultural factors such as
generational differences and the class-conscious educational system at play.
In 1880, the United Kingdom still contained 22.9 percent of total world manufacturing output, but that
figure was shrinking. Also, in 1880, its share of world trade was 23.2 percentthat would be 14.1 percent
in 1911 - 1913.

Twentieth century
Capitalism in the 20th century changed substantially from its 19th-century origins, but remained in place
and by the end of the century was established as the world's most prevalent economic model, after the
collapse of the USSR.
Several major challenges to capitalism appeared in the early part of the 20th century. The Russian
revolution in 1917 established the first communist state in the world; a decade later, the Great Depression
triggered increasing criticism of the existing capitalist system. One response to this crisis was a turn to
fascism, an ideology which advocated state-influenced capitalism; other responses are, a rejection of
capitalism altogether in favor of communist or socialist ideologies.
In the years after World War II, capitalism was moderated and regulated in several ways. Keynesian
economics became a widely accepted method of government regulation; meanwhile, countries such as
the United Kingdom experimented with mixed economies in which the state owned and operated certain
major industries.
Other aspects of 20th-century capitalism include the rise of financial markets, quantitative analysis of
market trends, and the increasing globalization of production and consumption.
[edit]Capitalism following the Great Depression
The economic recovery of the world's leading capitalist economies in the period following the end of the
Great Depression and the Second World War - a period of unusually rapid growth by historical
standards - eased discussion of capitalism's eventual decline or demise.[36]

In the period following the global depression of the 1930s, the state played an increasingly prominent role
in the capitalistic system throughout much of the world. In 1929, for example, total U.S. government
expenditures (federal, state, and local) amounted to less than one-tenth of GNP; from the 1970s they
amounted to around one-third.[17] Similar increases were seen in all industrialized capitalist economies,
some of which, such as France, have reached even higher ratios of government expenditures to GNP
than the United States. These economies have since been widely described as "mixed economies."
During the postwar boom, a broad array of new analytical tools in the social sciences were developed to
explain the social and economic trends of the period, including the concepts of post-industrial society and
welfare statism.[16] The phase of capitalism from the beginning of the postwar period through the 1970s
has also been variously described as "state capitalism" by Marxist and non-Marxist commentators alike.
The long postwar boom ended in the 1970s, amid the economic crises experienced following the 1973 oil
crisis. The "stagflation" of the 1970s led many economic commentators and politicians to embrace
neoliberal policy prescriptions inspired by the laissez-faire capitalism and classical liberalism of the 19th
century, particularly under the influence of Friedrich Hayek and Milton Friedman. In particular,
monetarism, a theoretical alternative to Keynesianism that is more compatible with laissez-faire, gained
increasing support in the capitalist world, especially under leadership of Ronald Reagan in the U.S. and
Margaret Thatcher in the UK in the 1980s.

Globalization
Although overseas trade has been associated with the development of capitalism for over five hundred
years, some thinkers argue that a number of trends associated with globalization have acted to increase
the mobility of people and capital since the last quarter of the 20th century, combining to circumscribe the
room to maneuver of states in choosing non-capitalist models of development. Today, these trends have
bolstered the argument that capitalism should now be viewed as a truly world system (Burnham).
However, other thinkers argue that globalization, even in its quantitative degree, is no greater now than
during earlier periods of capitalist trade.[37]
After the abandonment of the Bretton Woods system in 1971, and the strict state control of foreign
exchange rates, the total value of transactions in foreign exchange was estimated to be at least twenty
times greater than that of all foreign movements of goods and services (EB). The internationalization of
finance, which some see as beyond the reach of state control, combined with the growing ease with
which large corporations have been able to relocate their operations to low-wage states, has posed the
question of the 'eclipse' of state sovereignty, arising from the growing 'globalization' of capital.[38]
While economists generally agree about the size of global income inequality[citation needed], there is a
general disagreement about the recent direction of change of it.[39] However, it is growing within
particular nations such as China.[40] Chinas growth is benefited by Western economics has been
introduced and system has been reformed since 1980s.[41] The book The Improving State of the World
argues that economic growth since the Industrial Revolution has been very strong and that factors such
as adequate nutrition, life expectancy, infant mortality, literacy, prevalence of child labor, education, and
available free time have improved greatly.
In 2008, state intervention in global capital markets by the American and other Western governments was
seen by many as signaling a crisis for free-market capitalism.[citation needed](A good example would be
the actions of the United Kingdom government led by Gordon Brown in providing finance to banks
undergoing a liquidity crisis due to fears of 'toxic debt' bundles that had been sold on with mis-leading
credit ratings with 'toxic' debt being hard to differentiate from credible debt) Serious turmoil in the banking
system and financial markets due in part to the subprime mortgage crisis reached a critical stage during
September 2008, characterized by severely contracted liquidity in the global credit markets and goingconcern threats to investment banks and other institutions.

HAS CAPITALISM FAILED ?

Twenty years ago, the fall of communism in Eastern Europe seemed to prove the triumph of
capitalism. But was that an illusion? Constant shocks to the world's financial system over the
past few years prompted us to ask leading figures whether they thought Western capitalism
had failed.

The massive volatility and sharp equity-price correction now hitting global
financial markets signal that most advanced economies are on the brink of a
double-dip recession. A financial and economic crisis caused by too much
private-sector debt and leverage led to a massive releveraging of the public
sector in order to prevent Great Depression 2.0. However, the subsequent
recovery has been anemic and sub-par in most advanced economies given
painful deleveraging.
Now a combination of high oil and commodity prices, turmoil in the Middle East,
Japans earthquake and tsunami, eurozone debt crises and the US fiscal
problems (and now its rating downgrade) have led to a massive increase in risk
aversion. Economically, the US, the eurozone, the UK and Japan are all idling.
Even fast-growing emerging markets (China, emerging Asia and Latin America),
and export-oriented economies that rely on these markets (Germany and
resource-rich Australia), are experiencing sharp slowdowns.
Until last year, policymakers could always produce a new rabbit from their hat to
reflate asset prices and trigger economic recovery. Fiscal stimulus, near-zero
interest rates, two rounds of quantitative easing, ring-fencing of bad debt and
trillions of dollars in bailouts and liquidity provision for banks and financial
institutions: Officials tried them all. Now they have run out of rabbits.
Fiscal policy currently is a drag on economic growth in both the eurozone and
the UK. Even in the US, state and local governments, and now the federal
government, are cutting expenditure and reducing transfer payments. Soon
enough, they will be raising taxes.
Another round of bank bailouts is politically unacceptable and economically
unfeasible: Most governments, especially in Europe, are so distressed that
bailouts are unaffordable; indeed, their sovereign risk is actually fueling concern
about the health of Europes banks, which hold most of the increasingly shaky
government paper.
Nor could monetary policy help very much. Quantitative easing is constrained by
above-target inflation in the eurozone and UK. The US Federal Reserve will likely
start a third round of quantitative easing (QE3), but it will be too little, too late.
Last years US$600 billion QE2 and US$1 trillion in tax cuts and transfers

delivered growth of barely 3 percent for one quarter. Then growth slumped to
below 1 percent in the first half of this year. QE3 will be much smaller, and will
do much less to reflate asset prices and restore growth.
Currency depreciation is not a feasible option for all advanced economies: They
all need a weaker currency and better trade balance to restore growth, but they
all cannot have it at the same time. So relying on exchange rates to influence
trade balances is a zero-sum game. Currency wars are thus on the horizon, with
Japan and Switzerland engaging in early battles to weaken their exchange rates.
Others will soon follow.
Meanwhile, in the eurozone, Italy and Spain are now at risk of losing market
access, with financial pressures now mounting on France, too. However, Italy
and Spain are both too big to fail and too big to be bailed out. For now, the
European Central Bank will purchase some of their bonds as a bridge to the
eurozones new European Financial Stabilization Facility (EFSF). However, if Italy
and/or Spain lose market access, the EFSFs 440 billion euro (US$627 billion) war
chest could be depleted by the end of this year or early next year.
Then, unless the EFSF pot were tripled a move that Germany would resist
the only option left would become an orderly but coercive restructuring of Italian
and Spanish debt, as has happened in Greece. Coercive restructuring of
insolvent banks unsecured debt would be next. So, although the process of
deleveraging has barely started, debt reductions will become necessary if
countries cannot grow or save or inflate themselves out of their debt problems.
So Karl Marx, it seems, was partly right in arguing that globalization, financial
intermediation run amok and redistribution of income and wealth from labor to
capital could lead capitalism to self-destruct (though his view that socialism
would be better has proven wrong). Firms are cutting jobs because there is not
enough final demand. However, cutting jobs reduces labor income, increases
inequality and reduces final demand.
Recent popular demonstrations, from the Middle East to Israel to the UK, and
rising popular anger in China and soon enough in other advanced economies
and emerging markets are all driven by the same issues and tensions:
growing inequality, poverty, unemployment and hopelessness. Even the worlds
middle classes are feeling the squeeze of falling incomes and opportunities.
To enable market-oriented economies to operate as they should and can, we
need to return to the right balance between markets and provision of public
goods. That means moving away from both the Anglo-Saxon model of laissez-

faire and voodoo economics and the continental European model of deficitdriven welfare states. Both are broken.
The right balance today requires creating jobs partly through additional fiscal
stimulus aimed at productive infrastructure investment. It also requires more
progressive taxation; more short-term fiscal stimulus with medium and longterm fiscal discipline; lender-of-last-resort support by monetary authorities to
prevent ruinous runs on banks; reduction of the debt burden for insolvent
households and other distressed economic agents; stricter supervision and
regulation of a financial system run amok; and breaking up too-big-to-fail banks
and oligopolistic trusts.
Over time, advanced economies will need to invest in human capital, skills and
social safety nets to increase productivity and enable workers to compete, be
flexible and thrive in a globalized economy. The alternative is like in the 1930s
unending stagnation, depression, currency and trade wars, capital controls,
financial crisis, sovereign insolvencies and massive social and political instability.
Lord Meghnath Desai on end of Capitalism:

Capitalism is alive and well, but not in the Western countries - it has migrated eastwards.
Russian capitalism is somewhat old and in need of urgent repair, but the spirit of capitalism risk-taking, saving, investing, hard work - all those virtues have now migrated and are happily
ensconced in China, India, Indonesia, Korea and Japan - the countries which we never thought
would ever get out of poverty.
Western capitalism probably had half a century of over-indulgence - continued prosperity, full
employment, almost guaranteed growth - and that in its turn meant that our costs went up and
manufacturing industry migrated abroad, while finance has proved to be a fickle friend.
If Asia has vigorous energetic capitalism and we have tired old capitalism, we will end up paying
a huge price and we will trade our prosperity for their prosperity.
Socialism died 20 years ago - capitalism lives on.

Criticisms of capitalism
Critics of capitalism associate it with: unfair distribution of wealth and power; a tendency toward market
monopoly or oligopoly (and government by oligarchy); imperialism, counter-revolutionary wars and
various forms of economic and cultural exploitation; repression of workers and trade unionists; social
alienation; economic inequality; unemployment; and economic instability.
Notable critics of capitalism have included: socialists, anarchists, communists, national socialists, social
democrats, technocrats, some types of conservatives, Luddites, Narodniks, Shakers and some types of
nationalists.

Marxists have advocated a revolutionary overthrow of capitalism that would lead to socialism, before
eventually transforming into communism. Many socialists consider capitalism to be irrational, in that
production and the direction of the economy are unplanned, creating many inconsistencies and internal
contradictions.[71] Labor historians and scholars such as Immanuel Wallerstein have argued that unfree
labor by slaves, indentured servants, prisoners, and other coerced persons is compatible with
capitalist relations.[72]
Many aspects of capitalism have come under attack from the anti-globalization movement, which is
primarily opposed to corporate capitalism. Environmentalists have argued that capitalism requires
continual economic growth, and that it will inevitably deplete the finite natural resources of the Earth.[73]
Many religions have criticized or opposed specific elements of capitalism. Traditional Judaism,
Christianity, and Islam forbid lending money at interest, although alternative methods of banking have
been developed. Some Christians have criticized capitalism for its materialist aspects.[74] Indian
philosopher P.R. Sarkar, founder of the Ananda Marga movement, developed the Law of Social Cycle to
identify the problems of capitalism.

What kind of society isn't structured on greed? The problem of social organization
is how to set up an arrangement under which greed will do the least harm;
capitalism is that kind of a system - Milton Friedman