Political Economy

Subject: Economics
Type: Descriptive Essay
Pages: 2
Word count: 563
Topics: Capitalism, Finance, Globalization

According to Arrighi (2010) the nature of financial expansion towards the end of the 20th century is one that described the customary and regular economic system whereby business activities including trade and industry in the global space are controlled private ownership. It defines the concept of capitalism which has historically characterized the economic conditions of the world since the beginning of the 20th century. But Arrighi (2010) posits that the political and economic circumstances and dynamics of the world did not assume any significant changes other than the usual situation in which the economic system is based primarily on business ownership at the expense of the individual States. Towards the end of the 20th century the private entities got heavily involved in the system of production meant purposely for profit against the prediction and expectation of industry players for a possible change in the last years of the century. Therefore the financial expansion during the period defined a business cycle where business activities influenced the growth of the gross domestic product as a result of the efforts put forth by the private sector (Callinicos, 2009). The inference we can draw from this is that capitalism took the centre of business events in the run to the end of the 20th century, a situation that has existed and dictated the mode and pace of economic conditions in most parts of the world. Therefore no significant changes in the economic trends were experienced during the period except for the typical frequent penchant of historical capitalism. 

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Shutt (2010) tries to explain reason behind the private sector taking control of business activities over the years and states that prices and distribution of goods especially in the 20th century have been determined principally by competition in both local and global markets. This account for the underpinnings of private entities taking the centre stage of the economic activities because competition in the global market structure is one of the identifiable characteristics of the system of capitalism. The private sector competes favorably and makes concerted efforts to control the markets and this is responsible for the logic that capitalist economy ruled the system throughout the period of the 20th century. This made the private ownership of businesses quite frequent attracting a lot of firms to operate in the free capital markets and accelerate growth and expansion. Suanders (2008) also states that the great inputs by the private sector or its heavy involvement in the global economic activities are responsible for the level of financial expansion. The economy of the world has seen significant progress over the years and much credit go the efforts played by the private sector. Capitalist markets keep growing strong experiencing high levels of productivity per the increasing competition levels (Callinicos, 2009). This is has been the strength of the world’s economic circumstances and it goes a long way to influence the financial expansion or growth of business entities. Since this trend does not necessarily change, it is expected that will continue to be influenced by the tendency of capitalism. 

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  1. Arrighi, G. (2010). The long twentieth century: Money, power and time. Chicago: Verso 
  2. Callinicos, A. (2009). Imperialism and global political economy. Capitalism and la longue Duree, 12(2):76-85 
  3. Shutt, H. (2010). Beyond the profit system: Possibilities for the post-capitalist era. New York: Zed books
  4. Suanders, P. (2008). Capitalism. Minnesota: University of Minnesota Press
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