Free Research Paper About Globalization, Cold War

Type of paper: Research Paper

Topic: Capitalism, Economics, Economy, Socialism, Future, System, Socialist, History

Pages: 5

Words: 1375

Published: 2021/02/15

The main thesis that will be discussed in this paper suggests that capitalism is not bound to eventually lead to its own demise; rather, it will continue to evolve just like how it did for the past years and even decades. The persona that will be featured in this case will be that of a person living in the United States during the Cold War. The Cold War is essentially an indirect political and economic conflict between the democratic countries (who support capitalism) and socialist and communist countries (who on the other hand support a centrally planned type of economy).
Capitalism can be perceived as an economic model that is fueled by competition and rivalry. Capitalism, in general, supports the idea that the will of the market, the free market, is what governments and therefore policy makers must support because history has for numerous times, already proved that a centrally planned economy is one that is hard, if not impossible, to manage sustainably. Some of the evidences that centrally planned economies, which in terms of principles is the direct opposite of capitalism, is bound to fail is the fact that some of history’s greatest nations which were known to have followed the principles of a centrally-planned economy such as the Soviet Union (i.e. USSR) and other communist and socialist states have started to fail during the Cold War era while capitalist nations continued to break records and flourish.
Capitalism is not bound to imminently collapse in the future; rather, it will continue to exist in the future but it will take different forms. John Maynard Keynes, one of the most popular proponents of communism, supported the idea that capitalism is going to face an imminent failure or collapse—which is contrary to the main thesis of this paper. He also explained how a centrally planned economy (i.e. communist and socialist economies) initially led to success the great economic success story of the Soviet Union. The present condition of the Soviet Union’s centrally planned economy, however, signals the likely start of a collapse, after which a freer form of economy may follow, one where the state government only had minimal means of intervention. In Adam Smith’s work entitled an Inquiry into the Nature and Causes of the Wealth of Nations, he described the force behind the theoretical effectiveness of the free market as akin to an invisible hand that balances everything, which is in contrast to the visible but controlling hand that is being featured in centrally planned economies (Hunt). The capitalist economic system supports this idea.
The long history of the development of capitalism can be perceived as one of the many direct evidences that capitalism is bound to survive. The classical economic theory which suggests that at some point in the future (i.e. that future is today); an economic system that is future proof will be introduced. Apparently, that economic system is capitalism. It is important to stress that during the Cold War era, both the United States and the Soviet Union described their prevailing economic systems as liberal. In Speech at a party forum on theoretical work, March 30, 1979, the author stated that “the socialist economy is based on public ownership and socialist production is designed to meet the material and cultural needs of the people to the maximum extent possible and not to exploit them; these characteristics of the socialist system make it impossible for the people of our country to share common political, economic, and social ideals and moral standards; all this can never happen in a capitalist society; there is no way by which capitalism can never eliminate the extraction of super-profits by its millionaires or ever get rid of exploitation, plundering, and economic crises”. This points out why centrally planned economies are more geared to exist in the long run compared to capitalism. Operationally though, their economic systems greatly differed. Specifically, that of the United States was the real liberal economic system as its government has allowed the free will of the market to control the direction of the economy while that of the Soviet Union (although its economic system has been described as liberal) was restrictive because the government was the one managing the social and economic development programs and not the free market . The roots of what are now commonplace activities in the economy such as buying stocks, bonds, and even things like applying for a loan or balancing a portfolio is the evolution of the various economic systems that have supported them; the development of economics across time and continents is neither uniform nor complete. Capitalism’s long developmental history can be traced to as early as the feudal ages where an economic system that is dependent on wages and purchasing powers of the masses got tested (i.e. wages came from feudal lords and received by the skilled workers and peasants).
“The postwar call for state intervention to make the free market function more efficiently came from a striking variety of sources in Europe” . However, as evidenced by the current dire situation that the Soviet Union and other state economies whose government have a direct control involvement in its economy is in, the centrally planned model of economics is not bound to survive. Evidences that a mixed form of economy would emerge have been starting to accumulate during the war . For example, the plan to create a comprehensive and compulsory approach to ensure that all citizens of a country would receive social insurance and benefits took shape in Europe by as early as the 1940s. It only makes sense to assume that after the centrally planned economies collapse, because that is where the current situation tells us they will go, a mixed type of economy may follow. And if that mixed type of economy still does not work in the future, then it would only be logical to think that the governments would try something different, perhaps a freer form of economic system, one that is based on capitalism.
Now, if it is indeed true that capitalism is bound to fail one way or the other, then by the time that the economic bubbles that caused the Great Depression of 1929 burst, or at any other similar points in history, capitalism would have collapsed or have caused the collapse of great nations already, just like how the continuous adaption of the principles of centrally planned economies (i.e. communism and socialism) continue to negatively affect the lives of people in the Soviet Union. Clearly, this is not the case with capitalism because more and more countries, especially those from the west, are still clinging to it; in fact, emerging economies from Asia, which is one of the fastest growing regions in the world, are continuously embracing the principles and concepts of capitalism. In China’s case during Mao Zedong’s era, for example, the author of Interview with Italian Journalist Oriana Fallaci stated that China’s socialist economic system’s main means of development was to “rely mainly on their own efforts with external assistance subsidiary”, which by virtue can be considered as a form of capitalism because they rely at some point on external sources of capital and investments. In the same source, the author mentioned that “it depends on how you define capitalism; any capitalism is superior to feudalism and we cannot say that everything developed in capitalist countries is of a capitalist nature”.
Capitalism continues and will continue to evolve because it rewards the people who are willing to work hard for whatever possible gain doing so may bring, unlike in centrally planned economies where letting a group or a region get an upper hand is allowed by the economy policies. In Talk to State Officials Involved in Economy Affairs, January 12, 1983, the author stated that in socialist states, “some people in rural areas and cities should be allowed to get rich before others” and that “to let some people and some regions become prosperous first is a new policy that is supported by everyone”, the socialist people. Evidence that this is and will indeed is the case would be continuous development of regulations and policies that are meant to strengthen the grip of and the role that capitalism plays on society, the state governments, and the economy in general. Every so often the development of pro-capitalism corporate laws and policies marks a tipping point in the evolution of capitalism. Until recently, corporate law has not recognized the legitimacy of any corporate purpose other than maximizing profits; that old conception of the role of business in society is at best limiting an at worst, destructive. This indeed marks a historic milestone in the history of capitalism because before, it has been perceived that the ultimate goal behind a capitalist nation or organization is to make and maximize profits even at the expense of the environment or at some point, the welfare or some other aspect of the living standard of the members of the surrounding community. With the introduction of new corporate laws and policies, things are bound to change as capitalism shifts its role from a pro-profit anti-welfare economic system into a pro-profit pro-welfare one. If this trend continues, businesses in capitalism countries will become more sustainable and the ultimately, the future of capitalism, something that famous personalities in the field of economics have predicted to be an eventual failure, will be secured. As the world economy becomes more connected than ever, thanks to the worldwide phenomenon that is globalization, more and more nations will embrace the concepts of capitalism, especially the ones in the Asia and Pacific region. The history of trade and capitalism and capitalist economies are the same and different. For instance, trade may be instinctive, but the institutions of capitalism are a product of social evolution. Social evolution can be traced back to as early as the point when the first form of interaction between one person and another was made or recorded—which means that it and therefore capitalism, has a long history. This is contrary to what famous economists such as Adam Smith, John Keynes, and Karl Marx suggested in the main article.


In summary, one can arrive at a similar point about the future of capitalism—that it is bound to survive albeit in an evolved or much different form in the future. Also, it is important to note that majority of the assumptions made by the author of the main article, whose thesis statement is the topic of this paper, is based on the developmental history of capitalism. This can be interpreted as an element that somehow makes those assumptions, and therefore the findings in this paper more reliable.
Capitalism has been around for many years already and the findings from the sources reviewed in this case supports the notion that it will not cease to exist or even cause the downfall of a great nation just like how the Soviet Union collapsed as a result of its failure to adapt to the changing economic trends which at that point seem to be going towards capitalism and away from centrally planned economies. Capitalism will continue to exist although if its status and form today will be compared to that of the future, the latter would prove to be very much different. Another important evidence that this will indeed be the case would be the fact that even after a series of economic booms and busts, of crisis, depressions, recessions, and rallies, capitalist economies still continue to dominate the world economy today; examples of which include the United States, the United Kingdom, and the economies in Europe (i.e. the European Union), among others.

Works Cited

Hunt, M. "The World Transformed 1945 to the Present." Bedford/St. Martin's (2003).

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