Capitalism - the best solution of the modern economy or the best way to
The Bucharest Academy of Economic Studies
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Since the fall of the communist regimes in Europe, capitalism has been the
succeeding ideology and still remains the main form of politics in today's world. Also,
the revolutionaries who militated for the fall of the communist regime were impelled
by the capitalist dream. The current essay aims to express a new vision upon
capitalism, a vision which appeared fairly recently, and which was brought into view
after the appearance of the economic crisis in 2007, which in my opinion, represents
the future of economic thinking. The following words will try to picture the reality in
which we live in, from the complex perspective of economical psychology. Hundreds
and maybe thousands of economists have tried in the period previous to the crisis to
explain mathematically, statistically and economically the reason why so many
people were left without jobs, why wealthy people's fortunes decreased, why the
wages have gone down and how it was possible for a global recession to occur.
Although the veracity of these calculi is not to be contested, there is still a question
whether our life can be governed by numbers. Is it really that our thoughts can be the
result of a mathematical algorithm? Quite often it is, because there are surveys,
economical studies and analyses that illustrate the rational behaviour of economic
agents, based on their preferences. However, what happens when this behaviour
becomes irrational? This is the point at which mathematics fails to provide an
explanation. We are not prepared to accept and analyse the consequences of
economically irrational behaviour. Therefore, the conclusion of the essay will refer
strictly to these consequences. Economic psychology is a field that hasn't been
researched as much as others, although in my opinion, its study would lead to more
accurate answers about the causes of world crises.
George Akerlof, winner of the Nobal Prize in Economics, together with Robert
Shiller explained in their book 'Animal Spirits' the way in which human psychology
influences global economy, and therefore, capitalism. It is one of the few books
which study this field of economical psychology, and its year of release, 2009,
proves its recent character.
Although it might only be an illusion, I will proceed to demonstrate that this
freedom that capitalism offers has released the haunter behaviour specific to the
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modern capitalist. This behaviour is in fact the key to the biggest issue of the actual
system: exaggerated trust in the rationality of economical behaviour of the modern
I. Why Capitalism?
The general fall of communism happened gradually, however the year of
reference which is used for the extinction of European communism is 1989. It was
then when the last European states obtained freedom from the communist
oppression, and Romania was among these states....