The importance of effective stabilization policies in capitalist

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YUCHEN WEI 213532932 POLS 1090 The importance of effective stabilization policies in capitalist Over the long process of capitalist history, the sustain and prosperity of the capital never exist independently. It interAtwined and reinforced with the state policy, social contract, public demand and international trade. In this essay, the main purpose is to identify the significance of state policies to fit the needs of capitalism and society. This paper uses Canada as case study to first demonstrate the way in which the capitalist production is not a continuous process of repeated past but a succession of stages in conjunction with other factors. Then I will unravel the capitalist economy of Post-War Settlement, in which Keynesian Welfare State was the optimal resolution to deal with the fear that followed by 1930 The Great Depression , and Globalization. It contributed to the 1970s-Recession, when classical liberalism was resurged through a shift from Keynesianism to the neoliberalism. Before I examine the actual case, I found it is necessary to have a fundamental understanding about: the key elements, stages and effect of capitalist production that rel, key stages of the capitalist production, the effect of market demand over the capitalist production, role of the state and the ideologies that serve as a blueprint for actions taken in 1930s and 1970s. The circulation of capitalist production enabling the perpetuated capital flow grows out of the interactions of the five items, when these elements are combined and organized in the way: M C( mp lp ) C’ M’ that profits are made. In 1929, Wall Street Crash, the devastating effect of this event made capitalists lost their confidence. Commodities(C) —both capital goods(C) and consumer goods(C’)’ demands plunged dramatically. Canada was the worst-hit because of its high reliance on base commodities and because of the importance of international trade. Money(M), one of the fundamental features of capitalist economics, is a standardized means of exchange and measurement for different commodities. Since 76.7% of Canada's exports go to the U.S., and 1
YUCHEN WEI 213532932 POLS 1090 53.3% of imports into Canada come from the U.S. In 1920 Businesses faced overproduction, so the linkages between C M’ and M’ M broken, farmers couldn’t sell their wheats without undertook any losses. Right after the stock market crash, the increasing default of margin debt and leverage by market participants resulted in a major increase in bank Looser since stock is used as the collateral. Bank became conservative in their lending, so business started to the struggle with the insufficient flow of money. During the Great Depression (1929-1939), the linkages of C C 1 and M C 2 broken shortly after producers found they are overproducing. Hopefully, after Canada discovering the detriments of a resources-based country in the depression, a transitional process began to shift from a primary industry based economy to a manufacturing based one, and then to a service based economy. Just as most of the European countries and US, it is outbreak of World War II to pull

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