Will the Market Economy Die?

While CNN announced that there will be a debate on Friday night between Barack Obama and John McCain, McCain’s campaign announced that he may not be able to attend, and the reason is probably due to McCain’s needed presence in Washington to help the economic plans of the White House.

Etemad e Melli newspaper wrote in it’s editorial column: “in another move at the economic meetings in Toulon France, Nicolas Sarkozy said that the current crisis in the world economy could cost the annihilation of the market economy worldwide!” His opinion is important because he is a traditional right wing politician and is sitting on two important seats, one is the Elysee Palace and the other is the rotating President of the EU.

Has the life of the market economy come to an end? Are we hearing the bones of the global economy crushing?

Are these issues the fulfillment of Carl Marx’s prophecy in the nineteenth century where he said that the capitalist economy contains crisis within itself; whenever you control a crisis the next one will be more devastating. His dialectic analysis came from his dogmatist vision of human history. But the liberal economists didn’t agree with him. John Maynard Keynes, by creating his marginal markets theory, believed that the capitalist economy could deflect crisis from itself and by shifting itself to marginal markets create a breathing space for itself.

But still there are theocrats who believe this shock is not the end of the market economy but the end of an economic thesis named the Austrian Economy. But whether Sarkozy is right or the debate between Obama and McCain will happen, throughout this crisis we should understand that the world is facing one its worst economic crisis. The American government is going to help the market with 700 billion dollars, the British government has injected 30 billion pounds into the markets, the EU has pumped 200 billion euros in to the liquidity market. The Arab nations, with their role in the western markets, have injected approximately 200 billion dollars into the markets. We should add to this equation the efforts of China, South Korea and other South East Asian nations like Taiwan and Malaysia, to put it simply, the world economy has been helped with 2000 billion dollars and still it’s fragile.

George Bush, one of the creators of this crisis, in his meeting with the presidential nominees said this crisis could be worse than the financial crisis of the 30’s in America! This amount of cash injection into the markets shows that the economy is no longer the only influencing factor. The world economy is facing a complex problem, and as such the financial and monetary policies can’t alone help it anymore. Here social, political, international and cultural factors have become significant.

Since the problem has become complicated, the solutions can’t now be simple. Though the root of the crisis is the U.S. mortgage market, we shouldn’t forget that George Bush’s stupid pro-war policies have accelerated this situation. About 2 trillion dollars of U.S. financial power has been spent in the wars in Iraq and Afghanistan. The diseased U.S. economy has paid for it.

The government tried to distribute this pressure to different segments first. But now the whole world economy is trying to fill this gap in the U.S. economy. This is a clear example of the interdependency of economies in the globalization era. In less than 24 hours the earthquake in the trade trends in stock markets in New York could hit Dubai and Singapore. However, we must hope that the world economy will overcome this crisis otherwise the third world countries will be the first victims.