Managerial Economics, Welfare Corporate, Social Responsibility
Free market theory was a dominant theme of the 1780s propagated by economists such as Adam Smith. Amongst other things was its exclusive resolve that there should be minimal government involvement in the business of the economy if any at all. It was the era of the industrialization concerned with maintaining of internal advantages for the succession of competition within local markets therein maximizing profits for its shareholders (as its sole and ultimate objective) (Bakan, 2004). Proponents of this model argued that the market, in the absence of government control, would naturally adjust itself into a state of equilibrium by matching the aggregate demand to the aggregate supply for demanded commodities; the prevailing prices for commodities would be a reflection of the expectations of buyers versus the willingness to pay by consumers for consumer goods (Hoetzlein, 2010).
This thought was advanced by economists of the free market school of thought into the neo-liberalism economics. This new school of thought emerged a century later following the burst of free market ideals, growing out of the existing liberalism economics theory. What therefore was this old liberalism theory all about? Economic liberalism prevailed in America in the 1800 and early 1900 granting individuals the right to make profit in an increasingly unregulated market. Profit was therefore pursuable at no restrictions; an anything goes analogy that would soon plunge the world into unfathomed crisis a few decades later.
[...] These early debates still linger till now striking strong and ferocious debates and reactions both within the government and amongst corporate bodies. The subsidence of this World crisis and the decline in profitability in industries prompted the elite to revive economic liberalism leading to the development of neo-liberalism economics (Roberts, 2010). The neo- liberalism economics propagated for the exclusive rule of the markets within the economy; deregulation of government role on any aspect that would cut back on enterprise profitability (including workers' safety, environment safety and workers' unionization); privatization of public amenities and resources and reduced public welfare expenditure such as healthcare and education. [...]
[...] Finally, neo-liberalism has led to a change in the nature of politics both domestically and globally. Countries are now more than ever keen to protect their natural resources and ideologies even at the expense of developmental concerns that will actually develop more welfare to the citizens of the country. It is therefore possible to envision the eruptions of both civil and external conflicts and wars in response to this concerns. Reference Boyes, W Managerial Economics: Markets and the Firm. Arizona: Cengage Learning. [...]
[...] Managerial Economics: Welfare Corporate Social Responsibility Introduction Free market theory was a dominant theme of the 1780s propagated by economists such as Adam Smith. Amongst other things was its exclusive resolve that there should be minimal government involvement in the business of the economy if any at all. It was the era of the industrialization concerned with maintaining of internal advantages for the succession of competition within local markets therein maximizing profits for its shareholders (as its sole and ultimate objective) (Bakan, 2004). [...]
[...] The tide of independence and freedom of markets was meanwhile blowing across the Atlantics greatly positioning the new economic order to states that were alien due to prolonged socialism and colonization (Robbins, 2004). It is against this widespread neo-liberalism particularly by the United Sates (in its newly found capacity as the world's superpower) that economists such as Polanyi forecasted the setting in motions events that are yet to lead to another world crisis. The blatant permission of free market forces to be a lone determinant of the fate of humanity and the natural environment would ultimately result in the destruction of society (Polanyi, 2001). [...]
[...] Similarly, market controls were to be preferred to be independent of state. The state and politics herein were identified as the greatest threats to both democracy and efficiency in welfare provision. This is wrong and Polanyi (2001) in his initial analysis seems to have prophesized right considering the recent global financial crisis that was fuelled primarily by a crash of the financial system within the United States with ripples felt in Europe, Africa and the Americas. Collin (2011) undertakes to explain how it came to be that such strong states (predominantly in Europe perhaps) which had very strong financial markets and systems with the unlimited knowledge of modern economics would run into such “unforeseen” doldrums as those experienced in 2008 yet the existence of-and most propagated-advanced theory stated that the market would be self-correcting? [...]
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