Global Econmic Crisis-Term Paper
Introduction
Historical background of Global Economic Crisis
The new world crisis began with the collapse of the credit pyramid in the US, the consumer centre of the planet (the US accounts for as much as 40 per cent of global consumption). On incomes which had been shrinking since the early 1980s, the American masses were no longer able to acquire the previous quantity of goods. The US population was also unable to pay for even the cheapest credits. Analogous problems appeared in Great Britain and elsewhere in the European Union. A new crisis had opened up in the global economy, signifying that one big economic wave was being replaced by another. The world economy could not continue developing in the old fashion.
Throughout the entire period from 1975 to 2008, corporations and states had deliberately sought to reduce the cost of labour power. Companies transferred production to the Third World, causing the terms of employment in the first to deteriorate. For more than thirty years hourly wages did not increase, while the length of the working week grew.
Following the crisis of 2001, states increased their emissions. The European Union put 500 euro banknotes into circulation, and in Russia 5000 ruble notes were issued. The most active policy of emissions was in the US. During the last declining wave, the doctrine of cheap labour power had held sway in the business world. It was considered that the competitiveness of enterprises and of national economies depended directly on the size of wages and the cheapness of national currencies. The lower these indices, it was argued, the more efficient the economy. But when currencies were undergoing global devaluation, the fall in the price of labour power entered into contradiction with the consumer function which this price played. Because of the crisis, the cheapening of labour power that was occurring in the world economy had become uncontrolled, and the production of goods in the earlier quantities and at the
Historical background of Global Economic Crisis
The new world crisis began with the collapse of the credit pyramid in the US, the consumer centre of the planet (the US accounts for as much as 40 per cent of global consumption). On incomes which had been shrinking since the early 1980s, the American masses were no longer able to acquire the previous quantity of goods. The US population was also unable to pay for even the cheapest credits. Analogous problems appeared in Great Britain and elsewhere in the European Union. A new crisis had opened up in the global economy, signifying that one big economic wave was being replaced by another. The world economy could not continue developing in the old fashion.
Throughout the entire period from 1975 to 2008, corporations and states had deliberately sought to reduce the cost of labour power. Companies transferred production to the Third World, causing the terms of employment in the first to deteriorate. For more than thirty years hourly wages did not increase, while the length of the working week grew.
Following the crisis of 2001, states increased their emissions. The European Union put 500 euro banknotes into circulation, and in Russia 5000 ruble notes were issued. The most active policy of emissions was in the US. During the last declining wave, the doctrine of cheap labour power had held sway in the business world. It was considered that the competitiveness of enterprises and of national economies depended directly on the size of wages and the cheapness of national currencies. The lower these indices, it was argued, the more efficient the economy. But when currencies were undergoing global devaluation, the fall in the price of labour power entered into contradiction with the consumer function which this price played. Because of the crisis, the cheapening of labour power that was occurring in the world economy had become uncontrolled, and the production of goods in the earlier quantities and at the