The paper “ Arab Spring, Threats to Stability in the Middle East, Iran and North Korea’ s Seeking for Nuclear Weapons ” is an exciting example of an assignment on politics. Is democracy necessary for capitalism? No. Democracy is not a precondition for capitalism. To illustrate there, there are many societies that are not currently democracies but have capitalist economies. There are also societies that existed in the past which were not democracies but were characterized by capitalism. Some examples include such countries include South Korea under Park Chung-hee and Chile under General Augusto Pinochet.
Notably, both Park Chung-hee and Augusto Pinochet were army generals and therefore led their countries as dictatorships but the economies of South Korea and Chile had features of capitalism. As well, the fascist regimes of Mussolini and Hitler existed very well under an economic system that was capitalistic. These examples show that democracy is not necessarily a companion of capitalism. They also show that democracy is not required in order for capitalism to exist in a country. In other words, it is possible for capitalism to exist even in societies that do not have democratic regimes. What did the global financial crisis teach us about the realities of the global capitalist system? The first lesson is that market fundamentalism, which is the foundation of capitalism is not a panacea for economic success and stability.
Market fundamentalists of advocates of the free market economy claim that markets should be left on their own since they have mechanisms to correct themselves. This is not entirely true as seen through market failure that instigated the global financial crisis. The second point is that some of the policies advocated by the World Bank and IMF, which are capitalist-oriented are not applicable to all situations.
Countries need to evaluate and adopt policies best suit their individual situations. Thirdly, the GFC teaches us about the reality that state intervention is necessary for any economy. While the global capitalist system advocates private firms having a free hand in business, the GFC shows that today, more than ever, government intervention is necessary to ensure that businesses play by the rules to avert market failure. How has a rising China utilized the global capitalist system to its advantage? China has made use of the global capitalist system to its advantage reforming its governance and economic systems so as to benefit from the capitalist world.
The reforms go back to the end of 1976 with the start of post-Mao reform. From this point, China worked towards having a semblance of a market economy by promoting market openness. By the 1990s, China was moving towards a market economy status and in 2001, the country joined the World Trade Organisation. These changes have been accompanied by market attractiveness such as the provision of cheap labor, which has made China a hub of manufacturing for virtually every major company across the world.
Today, large companies such as Apple, Samsung, LG, Toyota, Caterpillar, and many others have some or all of their manufacturing operations is based in China. All this is evidence of how China’ s increasing market openness has made the country use the global capitalist system to its advantage.