Economic Crisis: Cause and Effect Analysis

1 Single and open fact:



Medical debt is an especially notable phenomenon in the United states the US being the world's only developed country not to offer universal health care. In less developed nations those on low income in need of treatment will often avail themselves of what ever help they can from either the state or non-state without going into debt, but in the US medical debt has been found by a 2009 study to be the primary cause of personal bankruptcy.



A 2007 survey had found about 70 million Americans either have difficulty paying for medical treatment or have medical debt. Studies have found people are most likely to accumulate large medical debts when they do not have health insurance to cover the costs of necessary medications , treatments, or procedures – in 2009 about 50 million Americans have no health coverage. However, about 60% of those found to have medical debt were insured. Health insurance plans rarely cover any and all health-related expenses; for insured people, the gap between insurance coverage and the affordability of health care manifests as medical debt. As with any type of debt, medical debt can lead to an array of personal and financial problems - including having to go without food and heat plus a reluctance to seek further medical treatment. Aggressive debt collecting has been highlighted as an aggravating factor. A study has found about 63% of adults with medical debt avoided further medical treatment, compared with only 19% of adults who had no such debt.



2 What is financial crisis



The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises and sovereign defaults.



Financial crisis is cover different mode of crisis like banking crisis, speculative bubbles and crashes, international financial crisis etc. these crisis can be manage impact can be tackle but if it is in the level of economic crisis it is not confined only in financial matters but it is impact on political matters too. Now days we are facing economic crisis which is directly related with capitalism. Capitalism in these days in tilted to imperialism. Imperialism of 21st century is closed with feudalism. So cycle of the society never can be repeated always it expected to develop but capitalism of this century insisted to repetaion for retain status quo. This is a main problem of this time. If time decided development of the society is running in its cycle then conclusion would be repetition, it is mattes of development cycle of the society always demanded development then capitalism change in imperialism would be wrong. Now it is not only an economic questions but also it is political and philosophical questions too.

















Different crisis within economic crisis:



Banking crisis: When banks suffers from imbalances created by balance and withdrawals of money by the depositors Banking crisis may arises



Speculative bubbles and crashes: If financial asset exhibits a bubble when its price exceeds the present value of the future income that would be received by owning it to maturity. If most market participants buy the asset primarily in hopes of selling it later at a higher price, instead of buying it for the income it will generate, this could be evidence that a bubble is present. If there is a bubble, there is also a risk of a crash in asset prices: market participants will go on buying only as long as they expect others to buy, and when many decide to sell the price will fall. However, it is difficult to tell in practice whether an asset's price actually equals its fundamental value, so it is hard to detect bubbles reliably. Some economists insist that bubbles never or almost never occur.



Well-known examples of bubbles and crashes in stock prices and other asset prices include the Dutch tulip mania, the Wall Street Crash of 1929 , the Japanese property bubble of the 1980s, the crash of the dot-com bubble in 2000-2001, and the now-deflating United State housing bubble.



International financial crises: When a country that maintains a fixed exchange rate is suddenly forced to devalue its currency because of a speculative attack, this is called a currency crisis or balance of payments crisis. When a country fails to pay back its sovereign debt, this is called a sovereign default. While devaluation and default could both be voluntary decisions of the government, they are often perceived to be the involuntary results of a change in investor sentiment that leads to a sudden stop in capital inflows or a sudden increase in capital flight.

Several currencies that formed part of the European Exchange Rate Mechanism suffered crises in 1992-93 and were forced to devalue or withdraw from the mechanism. Another round of currency crises took place in Asia in 1997-98. Many Latin American countries defaulted on their debt in the early 1980s. The 1998 Russian financial crisis resulted in a devaluation of the ruble and default on Russian government bonds.



Economic crises in wider sense: Negative GDP growth usually is called a recession. If it is prolonged may be called a depression, while a long period of slow but not necessarily negative growth is sometimes called economic stagnation.



Since these phenomena affect much more than the financial system, they are not usually considered financial crises per se. But some economists have argued that many recessions have been caused in large part by financial crises. One important example is the Great Depression, which was preceded in many countries by bank runs and stock market crashes. The subprime mortgage crisis and the bursting of other real estate bubbles around the world has led to recession in the U.S. and a number of other countries in late 2008 and 2009.



3 Causes and consequences of financial crises



Strategic complementarities in financial markets:It is often observed that successful investment requires each investor in a financial market to guess what other investors will do. In many cases investors have incentives to coordinate their choices. For example, someone who thinks other investors want to buy lots of Euro may expect the Euro to rise in value, and therefore has an incentive to buy Euro too. Likewise, a depositor in Bank who expects other depositors to withdraw their funds may expect the bank to fail, and therefore has an incentive to withdraw too. Economists call an incentive to mimic the strategies of others strategic complementarity. It has been argued that if people or firms have a sufficiently strong incentive to do the same thing they expect others to do, then self-fulfilling prophecies may occur. For example, if investors expect the value of the yen to rise, this may cause its value to rise; if depositors expect a bank to fail this may cause it to fail.Therefore, financial crises are sometimes viewed as a vicious circle in which investors shun some institution or asset because they expect others to do so.



Leverage:which means borrowing to finance investments, is frequently cited as a contributor to financial crises. When a financial institution (or an individual) only invests its own money, it can, in the very worst case, lose its own money. But when it borrows in order to invest more, it can potentially earn more from its investment, but it can also lose more than all it has. Therefore leverage magnifies the potential returns from investment, but also creates a risk of bankruptcy. Since bankruptcy means that a firm fails to honor all its promised payments to other firms, it may spread financial troubles from one firm to another .



Asset-liability mismatch:Another factor believed to contribute to financial crises is asset-liability mismatch, a situation in which the risks associated with an institution's debts and assets are not appropriately aligned. For example, commercial banks offer deposit accounts which can be withdrawn at any time and they use the proceeds to make long-term loans to businesses and homeowners. The mismatch between the banks' short-term liabilities (its deposits) and its long-term assets (its loans) is seen as one of the reasons bank runs occur (when depositors panic and decide to withdraw their funds more quickly than the bank can get back the proceeds of its loans).



In an international context, many emerging market governments are unable to sell bonds denominated in their own currencies, and therefore sell bonds denominated in US dollars instead. This generates a mismatch between the currency denomination of their liabilities (their bonds) and their assets (their local tax revenues), so that they run a risk of sovereign default due to fluctuations in exchange rates.



Uncertainty and herd behavior:Many analyses of financial crises emphasize the role of investment mistakes caused by lack of knowledge or the imperfections of human reasoning. Behavioral finance studies errors in economic and quantitative reasoning. Unfamiliarity with recent technical and financial innovations may help explain how investors sometimes grossly overestimate asset values. Also, if the first investors in a new class of assets profit from rising asset values as other investors learn about the innovation , then still more others may follow their example, driving the price even higher as they rush to buy in hopes of similar profits. If such "herd behavior" causes prices to spiral up far above the true value of the assets, a crash may become inevitable. If for any reason the price briefly falls, so that investors realize that further gains are not assured, then the spiral may go into reverse, with price decreases causing a rush of sales, reinforcing the decrease in prices.



Regulatory failures:Governments have attempted to eliminate or mitigate financial crises by regulating the financial sector. One major goal of regulation is transparency: making institutions' financial situations publicly known by requiring regular reporting under standardized accounting procedures. Another goal of regulation is making sure institutions have sufficient assets to meet their contractual obligations, through reserve requirements, capital requirements, and other limits on leverage.



Some financial crises have been blamed on insufficient regulation, and have led to changes in regulation in order to avoid a repeat. However, excessive regulation has also been cited as a possible cause of financial crises.



Fraud:Fraud has played a role in the collapse of some financial institutions, when companies have attracted depositors with misleading claims about their investment strategies, or have embezzled the resulting income. Many rogue traders that have caused large losses at financial institutions have been accused of acting fraudulently in order to hide their trades. Fraud in mortgage financing has also been cited as one possible cause of the 2008 subprime mortgage crisis.



Contagion: It refers to the idea that financial crises may spread from one institution to another, as when a bank run spreads from a few banks to many others, or from one country to another, as when currency crises, sovereign defaults, or stock market crashes spread across countries. When the failure of one particular financial institution threatens the stability of many other institutions, this is called systemic risk.



4 Marxist theories of Financial crises



Recurrent major depressions in the world economy at the pace of 20 and 50 years have been the subject of studies since Jean Charles Léonard de Sismondi (1773-1842) provided the first theory of crisis in a critique of classical political economy’s assumption of equilibrium between supply and demand. Developing an economic crisis theory become the central recurring concept throughout Karl Marx’s mature work. Marx’s law of the tendency for the rate of profit to fall borrowed many features of the presentation of John Stuart Mill’s discussion Of the Tendency of Profits to a Minimum (Principles of Political Economy Book IV Chapter IV) Empirical and econometric research continue especially in the world systems theory and in the debate about Nikolai Kondratiev and the so-called 50-years Kondratiev waves. Major figures of world systems theory, like Andre Gunder Frank and Immanuel Wallerstein, consistently warned about the crash that the world economy is now facing. World systems scholars and Kondratiev cycle researchers always implied that Washington Consensus oriented economists never understood the dangers and perils, which leading industrial nations will be facing and are now facing at the end of the long economic cycle which began after the oil crisis of 1973.



5 Brief history of economic crisis in points:



Past century was not crisisless. More than dozen of economic crisis faced by the univers. A short list of some major financial crises since 20th century is as followings;

1910 – Shanghai rubber stock market crisis

1930s – The Great Depression – the largest and most important economic depression in the 20th century

1973 – 1973 oil crisis– oil prices soared, causing the 1973–1974 stock market crash

1980s – Latin American debt crisis – beginning in Mexico

1987 – Black Monday (1987) – the largest one-day percentage decline in stock market history

1989-91 – United States Savings & Loan crisis

1990s – Japanese asset price bubble collapsed

1992-93–Black Wednesday– speculative attacks on currencies in the European Exchange Rate Mechanism

1994-95 – 1994 economic crisis in Mexico – speculative attack and default on Mexican debt

1997-98 – 1997 Asian Financial Crisis – devaluations and banking crises across Asia

2007-09 – The American financial crisis of 2007–2009 helped create the global financial crisis of 2008–2009, thus creating the Late 2000s recession.



6 Short Observation:



Economic crisis in United States of America is a hot topic through out the world. After faliuer of Soviet Union then somebody said world became Unipolar somebody dissent on it they said no it became multi-polar. It is still undecided matter. However, in a capitalist camp it was declared now world is uni-polar only capitalism is in existence and socialism is over. It is declaration of failure of Marxism too. In this concern author trying to start fresh debate on it.



Now capitalism is in crisis and traditional socialism in crisis. When Marxism came in existence in the world capitalist camp tried to prove it is utopia they create somehow confusion in politics but they entirely failed in economics. The famous book Das Capital, capitalist camp unable to criticize it. Feudalism never ready to rethink their on attitude capitalism which is near to imperialism is core character it is happens here too. Capitalism never compromised but they tried to make another arrangement by taking some features from Marxism and mixed up in capitalist character then they called it new international economic order. It has owned social security package. Some popular character taken from Marxism and applying through capitalism was happen few more decade. capitalism mixing with Marxist character in un-natural it may not long lasting it eventually exposed in first decade of 21st century. Capitalism believes on open market its principle is everything will decide by the market no state intervention but in economic crisis what happened in US. Did they left economic crisis to the market? NO, they never left it but they welcomed heavily intervention by the state. It is principally wrong as per capitalism. Therefore, capitalism failed. Economic crisis is result of political crisis, which is no doubt it, is crisis in capitalism.



In other hand, social power has another interesting story. 20th century itself was divided first half was in favor of socialism every they were in wining position but last half was dramatically changed it position all the socialist power failed. Now there is no single socialist country in existence. There was other good initiation to have a socialist power. Somewhere started people's war as per Maoism somewhere urban insurrection as per Lenin but all were setback. It is proved that in this century there is no possibility to achieve socialist power through traditional method and no possibility to retain as Marxism said as it is. Therefore, Marxism is not lifeless dogma it is needed to develop it as with enternalisingly, this changing society of this century.



Therefore, capitalism and socialism both are in crisis. There are no chances to make another ism for this world or to make another ism by taking common character of both of them. Still it is core contradiction between capitalism and socialism. Crisis of capitalism would be a great opportunity for socialism and crisis in socialism opportunity for capitalism. The bear fact is that both of them are not able to existence in status quo. They must develop their theory and practice as a scientific manner.



Why capitalism failiuer exposed in this particular time? It is a big question. After Das capital capitalism tried to maintain itself by all of its alternatives. Under the leadership of US they tried to unite the whole world in the name of fighting against communism, protecting war, fighting against terrorism etc. for this purpose capitalism managed war for a century long in a cartel ling system, collection of money as levy for war, capturing natural resources water, gas, oil and others through war. capitalism disseminate their massage to the world there is no more chances of communism no more revolutionary change without consent of the US. They tried to establish it. US launched war and they earned money, they tried to collect security tax those who are not joining them they will attract, political system defining democracy functioning style every thing is tried to make it US monopolized all are against socialism the threat created by the third world poor nation and people who like to liberate from exploitation and injustices, is big challenges of capitalism. So only, the objective to suppress those emerging threat capitalism follow each and every measures then they derailed their own principle now it is imperialism.



Why socialism also in threat and challenged? Socialist power failed now no single nation has its existence it is big question for us. Why they failed? Because of lack of competition is a simple answer. If there is, no compulsion to compete each other there is any compulsion to be a loyal to the people. Then people and leader will be far from each other then dictatorship and autocratic ruler would be emerging. Traditional Marxism we cannot found competition. Marxism is science but it is not a lifeless dogma so it is changeable. 19th century was different then 21st century. Society is changing tremendously in a changing context we need develop in theory and develop in practice too. So it is needed to develop in Marxism as societal changing speed.



7 Where are lapses?



Development of society is in its own course. Feudal society always develops towards capitalism and capitalist society is in socialism. There is no doubt and debate on it whatever in capitalism and socialism. Now a days those countries who advocates capitalism they definitely fought against feudalism. The means of fighting was armed and unarmed no doubt. They achieved capitalism. Capitalism was needed to develop in socialism but it turned into imperialism in this point capitalist missed .Imperialism is another form of feudalism. Capitalist they fought against feudalism not for reestablishment of other forms of feudalism in the name of imperialism. They did it. Communist also failed themselves when capitalism achieved then it is needed to turned to socialism. They failed to check it to become imperialism. Therefore, capitalism and socialism both are in rethink position.



8 Where is capitalism failure?



When they fought against feudalism, the slogan was freedom. When they achieved their goal through capitalism is it able to address their goal named freedom? Questions started from this point. When capitalism winover feudalism then capitalist rule exist instead of capitalist freedom. Contradiction increased for fair competition. Capitalism tried to retain their position follow moral and immoral methods specially war cartelling, arms business, and economic blocked. Such immoral move contradiction creates in third world countries interest. Unnecessary suppression, exploitation, weakened to capitalism and at the same time assumed that these are by product of capitalism.



9 Where is socialism failure?



After long struggle against feudalism communist movement established socialist world. It was big challenge for capitalism. When they achieved their political goal then they started to economic development. Economic development through socialism was more challenging. Competition factor is missing then they failed in their course. In a political field there is also no chance of competition because of lack of competition authoritarian rule revive it was quit against the path of socialism.







10 What should be done? Their Crisis, Our Consequences



Capitalism creats crisis and impacts to all societies. Capitalism can creats crisis but it cannot search solution neither it can avoid short-term and long-term crises of falling profits and economic stagnation. However, as Marx pointed out over 150 years ago, capitalism has internal regular mechanisms- driving down wages, reorganizing work, massive bankruptcies rampant curruption -that allow it to recover from these crises. There will be no “final” economic crisis of capitalism -it will have to be overthrown. It means crisis in capitalism, Crisis in capitalistic politics and crisis in its philosophy.



But the growth and collapse of fictitious capital - what Marx called the “circulation of property rights”-is a feature of every capitalist business cycle. As the business cycle passes its peak, capitalists look for new profitable investments. Because profits are slipping in the production of goods and services, capital flows into financial instruments that are claims on future wealth - speculative bets that the economy will continue to grow. Financial bubbles inevitably burst as slowing economic growth in the real economy reduces the value of the assets- such as housing - upon which fictitious capital rests. The results are all too familiar- investor panic, sharp drops in the prices of stocks and other financial instruments, and a rising tide of bankruptcies in the financial sector.



Ultimately, the underlying health of the “real” capitalist economy cushioned the impact of these financial panics. A wave of bankruptcies and mergers and acquisitions that eliminated inefficient fixed capital, “lean production” that increased labor productivity (the rate of exploitation), and neoliberal capitalist state policies that deregulated capital and labor markets, all stimulated rising profits. The “long-wave” of expansion of capital accumulation reduced the length and depth of financial crises.



The current financial meltdown, however, comes at a point when there are clear indications that the U.S. and global capitalist economies are entering a new long-wave of stagnation. The very growth of investment -in particular the increasing capitalization/mechanization of production - in the real economy during the long-boom of the past quarter century is now turning into its opposite, pointing toward a long period of declining profits and stagnant capital accumulation.



In the context of a new long-term fall in profitability, the meltdown that began in the subprime mortgage market and has spread to the heart of Wall Street has much more ominous implications for capital. The bankruptcies or near bankruptcies at Bear Stearns, AIG and other firms and the instability in the stock market are the “fire alarm” heralding a sharp and deep recession. If financial bankruptcies were to spread unchecked, a full-scale collapse of production on the scale of 1929-31, the onset of the Great Depression, could ensue.



A full-scale depression, however, is unlikely. The well-founded capitalist fears of the political effects of a depression are leading both Democratic and Republican politicians to abandon some of the orthodoxies of neoliberal economic policy and to approve – after some messy political bargaining, given the deep popular anger - some version of Bush’s $700 billion bailout for the former investment banks (now converted or absorbed into all-purpose banks) and insurance companies. This subsidy, and a temporary and partial return to state regulation, will probably stabilize the financial sector and reduce - but not prevent - the depth and length of the coming recession. Meanwhile, other corporate sectors are lining up at the trough for their share of the bounty of “business Keynesianism,” notably the used-to-be-Big Three auto companies.



Capital as a whole will pay a price for this bailout. While a politically disastrous economic collapse will be avoided, the underlying cause of falling profitability- excess fixed capital - will remain after the bailout of the financial sector. As a result, profits after a recession will remain too low to encourage substantial new investment in the production of goods and services. At the same time, the massive capitalist state infusion of cash into the banking system, financed by growing federal deficits, will increase the supply of money. The likely result will be too much money chasing too few goods - a new wave of inflation.



Whoever is elected President in November 2008 will likely face the same “stagflation” the combination of price inflation and economic stagnation — that Nixon, Ford, and Carter wrestled with through the 1970s. For most of us, an ever-sharper attack on working-class standards of living will be the main consequence of the current crisis. Those of us on the revolutionary left can only hope that a return of stagflation will also encourage a return of the working-class and popular struggle of earlier decades.



There are some basic points for activists to raise in the current crisis. First, Congress’ plan privatizes the gains and socializes the losses from the current speculative frenzy. But if there is anyone who should benefit from government intervention it’s ordinary citizens, particularly the millions of families at risk of losing their homes because of exorbitant mortgages, and the newly tightened bankruptcy laws.



If there’s money available to buy up and “socialize” collapsing banking giants, then those same resources can just as easily be used to restructure the mortgages of struggling homeowners. There is also money for a jobs program to build affordable and energy-efficient housing, hospitals, mass transit and schools.



While we’re at it, why not put some of those funds towards protecting social security, and ensuring universal health care through a single-payer system? After all medical crises are the single biggest cause of bankruptcies in the country. Single payer is a step towards stabilizing the housing market!



Secondly, the “luxuries” our society really cannot afford are the costs of war and empire – George W. Bush’s Iraq war which will ultimately cost between one and two trillion dollars, the U.S. military bases in 150 countries, or the six percent increase in the Pentagon’s budget for fiscal 2009 which will now be a tidy $621.5 billion, including $68.6 billion for the wars in Iraq and Afghanistan (but not including all the “emergency supplementary” allocations to be demanded later for these imperial occupations).



Third, we need to explain why the government and the capitalist state respond to the needs of capitalists, not to the wishes of the majority of people. The wave of popular anger against the bailout for Wall Street forced the administration and Congressional leadership to write into the legislation some timid regulation and curbs on “excess” CEO salaries at a time of rising inequality. These gestures can’t hide the underlying reality that in times of crisis, the state “socializes” the risks for capital, while “privatizing” the most essential necessities for everyone else.







11 "Concentrated economics"



Lenin once remarked that politics is concentrated economics. The economic crisis that is sweeping the world is having very serious effects on the psychology of all classes, beginning with the capitalists themselves. In a period when capitalism was going forward, the pressure of bourgeois ideas on the working class and its organizations was redoubled. In Britain there has not been a serious economic recession for more than two decades. Therefore, the arguments of the bourgeois politicians and economists (the two work hand in glove) about the miraculous qualities of the "free market" found an echo even in the working class, but particularly in its leadership.



This was the material basis for the total degeneration of the Social Democracy and the "Communist" Parties in Europe and of the trade union leaders everywhere. In Britain, which was in the vanguard of the capitalist counterrevolution for the past three decades, it was the soil on which New Labourism was spawned and flourished under the leadership of the Reverend Anthony Blair.



For the activists of the Labour movement, this period was a nightmare that appeared to have no ending. There seemed to be no limit to the degeneration of the leaders of the mass organizations, no depth to which they were not capable of sinking, no vile action they were incapable of performing to please the ruling class and, of course, the Market. The despondency of the activists led to apathy and the emptying out of the mass traditional organizations, which were filled up with middle class careerists looking for jobs and promotion. This in turn, led to a further lurch to the right, which further deepened the disillusionment of the workers. This was a vicious circle that fed upon itself and it has lasted until now. But now things are beginning to change rapidly.



Human consciousness in general is conservative. People normally fear change and cling to what is familiar. Habit, routine and tradition weigh heavily on the consciousness of the masses, which lags behind events. But at critical moments in history events are accelerated to the critical point at which consciousness catches up with a bang. We have now reached such a critical point.



What is true of the industrialized nations of the world is ten times truer of what is sometimes referred to as the "Third World". The number of those living in extreme poverty is rising rapidly in Asia, Africa and Latin America. A report published recently by the United Nations said that a quarter of all children in the developing world are underweight; more than 500,000 women die annually in childbirth or of complications from pregnancy; and a third of developing countries' growing urban population live in slums. A report of the Inter-American Bank this summer warned that increasing prices would push 26 million people in Latin America into conditions of absolute penury. This was the position after a long period of economic growth on a world scale. This was the best that capitalism had to offer. What will happen under conditions of crisis?



We are therefore faced with a worldwide phenomenon that is pregnant with revolutionary implications. Thus, globalisation manifests itself as a global crisis of capitalism.



12 What is the solution?



When we talk about solution, we must have fixed the problems first. If present crisis is the result of regulatory failure to guard against excessive risk-taking in the financial system, especially in the US. It is further argued that "we must ensure it does not happen again". But how are these miracles to be performed? By what mechanism? The bankers have a thousand ways of evading regulation. They keep off-the-books accounts that make it all but impossible for regulators to discover their fraudulent activities. Even the US government uses similar tricks to disguise the real dimensions of its budget deficit.



The conclusion is quite clear. Either we have a free market based on the pursuit of profit, or we have a nationalized planned economy. But "regulated capitalism" is a contradiction in terms. The Financial Times puts the question as:"no matter what hare-brained ideas politicians come up with to curb controversial pay packets, bright minds in finance will find a way round them or exit the regulated part of the industry."



What is necessary is to abolish these grotesque casinos that decide the fates of millions altogether and replace capitalist anarchy with a rational society based on a planned economy. It is said that the measures taken by Bush and Brown represent nationalization. But these measures have nothing in common with the socialist idea of nationalization. They are not intended to remove economic power from the hands of the wealthy parasites who constitute a monstrous burden on society and an obstacle in the path of progress. On the contrary, they represent an attempt to protect the interest of these parasites by giving them vast subsidies, paid for out of the pockets of the working class and the middle class.



Socialists are radically opposed to these policies, which have nothing in common with genuine nationalization and are only a kind of state capitalism, intended to safeguard the capitalist system. They lead inevitably to an increase in monopolization, mass sackings, bank closures, higher mortgages and other anti-working class measures. The bankers are rewarded for their nefarious activities by the state, which buys up all their losses, then spends further vast amounts of the taxpayer's money to make them profitable, and when this has been done, to sell them back to the bankers, who from this will make a double killing at the expense of society. Then they can resume their speculating and thieving all over again.

What is necessary is to take the commanding heights of the economy out of private hands, by nationalizing the banks and insurance companies and big companies with minimum compensation on the basis of proven need only. Only when the productive forces are in the hands of society, will it be possible to establish a rational socialist plan of production, where decisions are taken in the interests of society, not of a handful of wealthy parasites and speculators.



That is the fundamental aim of socialism. It is an idea that will now be understood and welcomed by millions of people who previously regarded it as it as something strange and alien. The people demonstrating on the streets of New York against the Bush Plan were not socialists. Twelve months ago they would probably still have been defenders of the free market. They have never read Marx and doubtless see themselves as patriotic Americans. But life teaches and in situations like this people learn more in a few days than in a lifetime. The working people of the United States are learning fast. And, as Victor Hugo once said: "No army is so powerful as an idea whose time has come."





13 Economic Democracy as the only way out of the crisis

Imposition of some financial controls in the name of market economy, globalization,liberalization for establishment of capitalist economic order itself is a good cause and creators of economic crisis.Huge and growing concentration of income and wealth, and consequently economic power will be emerged with few profit making angle differences power clash would be occurs. Therefore, inequality, with its economic, political and social implications, the continuing destruction of the environment, unemployment and job insecurity, as well as misery for most of the world’s population will continue, so that the elites and the privileged social groups all over the world could continue enjoying their lavish living patterns at the expense of the rest of the world.



In the meantime, people are increasingly realising, particularly after the latest crisis which may last for a significant time, that their economic fate, in fact, the quality of their lives, is not and could not be controlled by themselves within the market system, but is controlled instead by invisible forces, the market forces, and the visible economic and political elites which control them.



But, why should we take a system like the present catastrophic one for granted? Economic systems are not God’s creations. They are man’s creations, the main creator is capitalism.



A model of economic democracy, as an integral part of an inclusive democracy, which is pro people democracy on the basis of economic system.



First, the present huge and growing inequality in income, wealth and economic power is impossible to stablish an economic democracy. All parts such as level of production, consumption and investment, amounts of work and leisure implied, technologies to be used, are made by the peoples body collectively and without representation. The equal distribution of economic power impact on equal distribution of political and social power. Peoples participation in decision taking, making institution and its management it makes only sense of inclusive democracy only this way can face the economic crisis.



Second, within inclusive democracy, there will be no economic,social or political elites or privileged groups means classless society which is socialism. Only the socialism can fight against such economic crisis. Economic crisis is cause and effect both core characteristic of imperialism tilted rough capitalism. In fact, peoples participatory democracy can be called socialism aims at satisfying the double aim of: (a) meeting the basic needs of masses of the peoples-which requires that basic macro-economic decisions have to be made democratically, and (b) securing freedom of choice- which requires the individual to make important decisions affecting his/her own life eg what work to do, what to consume, etc.



Third, covering the basic needs of the masses of the people is secured institutionally, so that hunger, homelessness, lack of adequate health care and illiteracy will be over. Thus, a crucial difference from market-based or planning-based models, crucial distinction between basic and non-basic needs. Remuneration is according to need, as far as basic needs is concerned, and according to effort for non-basic needs. As far as covering basic needs is concerned, Iiclusive Democracy implements the basic communist principle “from each according to his/her ability to each according to his/her need”.



Fourth, unemployment and job insecurity will also be remembered as part of the core character of imperialist tilted capitalism. Today, local economies depend on outside centres for the organisation of production and work, for covering their needs in goods and services, even for the provision of social services (education, health, etc.).



Work in an economic democracy would be allocated on the basis of the preferences of masses of the people as producers and as consumers. Thus, citizens, as producers, would select the work they wish to do while citizens, as consumers, through their use of vouchers or credit cards, would determine their own consumption pattern and indirectly the allocation of labour resources in each line of activity.



Fifth, an economic democracy, as envisaged by the Inclusive Democracy, implies a high degree of devolution to grassroot level among the masses of the peoples themselves. Through its institutional framework, offers the best hope for a better human relationship to nature than could ever be achieved in a market economy, or one based on socialist statism. Thus, political democracy gives the power to the people to decide the relationship of society to Nature on the basis of the general interest of the community rather than the special interests of privileged social groups.In this way the satisfaction of the basic needs of the community and of those non-basic needs for which members of the community express a desire and are willing to work extra to cover them.



Finally, democracy in the social realm would be a decisive step in the creation of the conditions for a harmonious nature-society relationship, as the phasing out of patriarchal relations in the household and of hierarchical relations in general, could reasonably be expected to create a new culture of non-domination that would overcome both nature and society.



14 Conclusion: Now we are facing economic crisis created by the capitalist world specially from USA. Basically it is political crisis. Capitalism intented counter to the Marxism,they tried to creat fack economic system, it was called new international economic order. It has copied some characteristic from Marxism like social security and some from Capitalism. Mismach of both Marxism and capitalism was not a true philosophy nor a complete system. It was just counter system to Marxism. Marxism is a science so never defets from any others conspiracy. Capitalism launches war, proliferation of arms industries, monopolization of economic system. All are intended to overcome crisis. Some times, it is blamed that US did business in war for not a real cause but making profit Even Iraq war and fack currency produced and facke economic growth also showed which was inevitable to expose approperate time and condition was economic crisis.



Capitalism creats two crisis and would be defeated by two crisis at a time those are economic crisis and environmental crisis. The peoples of the world have therefore every reason today, before the economic crisis and the parallel ecological crisis destroy the quality of life of the whole masses of the people in the planet, to begin building an Inclusive Democracy movement and take steps like the ones described elsewhere,so that we can move to replace the present system of capitalist market economy with an economic democracy-as part of an Inclusive Democracy- and transcend the present multidimensional crisis.

ईन्डोनेशियाको यात्रा, संविधान निर्माणमा धर्म निरपेक्षताको वहस

गत अक्टुवर १२ देखि १६ सम्म ईण्डोनेशियाको राजधानी जाकार्तामा संविधान निर्माणमा दक्षिण दक्षिणको अनुभव विषयक कार्यशालाको आयोजना भयो । असंलग्न राष्टंहरुको आन्दोलनको संविधान निर्माण ईकाई र आईडिया ईण्टरनेशनलको संयुक्त आयोजनामा यस क्षेत्रका संविधान निर्माताहरु वीचको अनुभव आदान प्रदान गर्नुका साथै गतिला पाठहरु सिकाउने अवसर उपलव्ध गराउनु पनि सो कार्यशालाको उद्देश्य थियो । विश्वका दुई दर्जनभन्दा वढी मुलुकका संविधानविदहरुको जमघट गराएर आयोजकले एकै थलोमा संसारका अनुभवहरु सुन्ने र सुनाउने अवसर जुटाईदिएको थियो । त्येा कार्यशाला गोष्ठीमा नेपालको तर्फवाट तिनजना सहभागी मध्य यो पंक्तिकार पनि थियो । अरु सहभागीहरुमा सभासद सुनिलवावु पन्त र संविधानविद डा विपिन अधिकारी हुनुहुन्थ्यो ।



ईण्डोनेशिया नेपालमा दुतावास नभएको मुलुक नेपालमा मात्र हैन भारतमा पनि उसको दुतावास छैन नेपालीहरुले त्यहा जानकालागि या त वंगलादेश या त थाईल्याण्ड जानु पर्छ । मुश्लिम मुलुक भिसाकालागि अलि कठिन रहेछ एकै दिनमा भिसा दिने प्रचलन रहेनछ तयसैले थाईल्याण्ड वा वंगलादेश जतावाट गए पनि अरु केही दिन लम्विने निश्चित थियो तर दिन लम्व्याएर जान नसकिने मेरो अवस्था त्यसैले कार्यपत्र पठाएर पनि तुरुन्तै जान सकिने भए मात्रै जाने अन्यथा नजाने मानसिकता वनाएर वसेको थिए आयोजकको अथक मेहनत पछि भिसा अन अराईभल पत्र प्राप्त भयो जानुभन्ा एक दिन मात्रै पहिला त्यो पनि शुक्रवार आईतवार त उडनु नै पर्छ । कुनै तयारी विना नै ईण्डोनेशियाको राजधानी जाकार्ता जाने भईयो । सोझो उडान थिएन त्यसैले िसंगापुर हुदै जानु पर्ने भयो हामी हिडयौ । पाच घण्टा सिगापुर त्यसपछि डेढ घण्टाको उडान पछि जाकार्ता यात्रा लामो थिएन । जेन तेन जाकार्ता पुगियो ।



पुगेकै भोलीपल्ट कार्यक्रम शुरु हुने थिएन त्यसैले म्यूजियम घुम्न जाने तयारी भयो तर विदाको दिन परेछ तैपनि म्यूजियम घुमियो । म्यूजियमकम कमाण्डर मिस्टर डानियलको फूर्ति पुरातन जेल गृह र फर्टिलिटी क्यानलको व्यख्या ज्यादै मार्मिक थिए । रेष्टराको लन्च मेन्यूको पछाडि तस्विरहरु कामदारहरुको पेशागत दक्षता र पेशा प्रतिको प्रतिवद्धता प्रगतिको अर्को उदाहरण हो । साझ कार्यक्रम शुरु भयो उदघाटन डिनरवाट । लगातार चार दिनसम्मको उक्त कार्यशाला घनिभूत थियो । विभिन्न मुलुकका संवैधानिक विकास र प्रचलनका अनुभवहरु साटासाट गर्नुकासाथै नेपालको संविधान निर्माण प्रकृयाका वारेमा पनि चासोकासाथ छलफल भएको थियो । कार्याशालाको एउटा विषय थियो धर्म निरपेक्षता । हिन्दु अधिराज्य नेपाल गणतन्त्र र धर्मनिरपेक्ष भएको छ । धर्मनरिपेक्ष धोषणा हुनुको कारण र प्रभाव के थियो भन्ने वारेमा पनि चासोकासाथ छलफल भएको थियो ।



ईण्डोनेशिया मेरो दिमागमा भारतको मध्यम शहर सरह होला भन्ने थियो । तर स्थिति अर्कै रहेछ । जाकार्ता नया दिल्ली पनि हैन सिगापुर वा वैकक सरह पो रहेछ । गगनचुम्वी महलहरु सफा र सुन्दर शहर कानून कुनै पनि शर्तमा नतोडने नागरिकहरुको संस्कृति ईण्डोनेशियाका अनुकरणीय पक्ष हुन् ।



जाकार्ता स्थित अन्तराष्ट्रिय विमानस्थलवाट झण्डै एक घण्टाको मोटर यात्रावाट पुगिने मुख्य शहरमा अवस्थित फोर सिजन होटल एण्ड रिसोर्टको भव्य आतिथ्य र घनिभूत कार्यक्रम एक अर्काका परिपुरक थिए ।



एक सय अमेरिकी डलर साटदा नौलाख छव्वीस हजार रुपया हुने रहेछ तर खाना खान झण्डै एकलाख तिर्नु पर्ने अनौठो रहेछ । एकसय यूरो टयाक्सीकालागि तिर्दा पनि मलाई त्यस्तो केही लागेको थिएन तर एकलाख पेटभरी भातकालागि भनेर संझिदा मलाई अनौठो लाग्यो । एक दिन डिपार्टमेण्टल स्टोरमा खाना खान गयौ सामान्य खाना थियो भात माछा र तरकारी तिन आईटम तिनजनाको एकलाख चारहजार डर लाग्दो रुपया तिरियो भनने लाग्यो तर डलरमा हिसाव गर्दा त दश डलर नेपालीमा हिसाव गर्दा सात सय त्यति औधि त हैन मुग्लिनको भात जस्तै हो भैपनि मानसिकता अर्कै वनाईदिदो रहेछ ।



पाच दिनको वसाई पछि जाकार्ता छोडनु पर्ने भयो । विमानस्थलमा प्रत्येक मानिसले डेढलाख रुपया तिर्नु पर्ने रहेछ तिरियो । त्यस पछि विजनेश क्लासको टिकट भएकाले विजनेश लाउन्जमा पसेर चिया नास्ता गरेर विमानस्थलमा रहेका सपिड सेन्टरमा किनमेल गर्न खुव घुमियो तर चकलेट हेरेको पचासहजार रुपया सर्ट हेरेको त्यस्तै हामी कहा रंगी चंगी र प्राय पिकनिक जादा लगाउने झाले माले सर्ट ईण्डोनेशियाको औपचारिक पोशाक मानिने रहेछ । त्यसैले धेरै केही खरिद गर्न सकिएन हार खाएर वाकी इण्डोनेशियन रुपया साटेर िसंगापुरकालागि रवाना भईयो । डेढ दुई घण्टामात्रको यात्रामा िसंगापुर पुगियो । िसंगापुरमा एक दिन वस्नु पर्ने भएकोले अध्यागमन जाच गरेर वाहिर निस्कने सोच गरियो ।



िसंगापुर अर्को अनौठो । विमानस्थलमै मोवाईल गरेर टिकट काटी सटटल वस आइपुगिहाल्यो । सवै जाने गरेको मुस्तफा सपिड सेन्टरमा गईयो । वाटो पुरै वगैचा जस्तो छ । समुद्री किनारा झकिझकाउ वस्ती गगनचुम्वी महल सडकमा न फोहर छ न किसंगर पात खस्ने चान्स पनि छैन । हेदैै रहर लाग्दो ंिसंगापुर सपिड सेन्टरको भव्यता र विशालता वयान गरेरै साध्य छैन पेटभरी घुमियो आफनो ईच्छा अनुसारको किनमेल पछि टयाक्सी चढेर फर्कियो तर वसभन्दा पनि सस्तो पर्छ वा केही भन्नै नसकिने ।



मुस्तफा सपिड सेन्टर मानिसको घुईचो छ तर टवाईलेट वाथरुम सफा छ यथोचित सावुन पानी टवाईलेट पेपरको व्यवस्था छ । सूचना लेखिएको छ सावुन चोरलाई कडा अपराध मानिने छ यसकालागि जरिवाना र सात वर्षसम्म कैद हुनेछ । िसंगापुरको यो सुचना र जाकार्तामा लेखिएको लागु औषधको कारोवारीलाई मृत्यूदण्ड हुनेछ भनेर जताततै लेखिएको सूचना यो यात्राका उल्लेखनीय जानाकारी रहे ।



ईण्डोनेशियामा आचे विद्रोहीहरुको समस्याथाईल्याण्डमा दक्षिणी भूभागको विद्रोह छलफलका मुख्य विषय थिए । केन्याको संविधान अझै लागु हुन नसकेको घटना फिजीको समस्या र पुरै दक्षिणमा कुनै पनि मुलुक समस्या विहिन नरहेको छलफलको मुख्य सार थियो ।



ईण्डोनेशियाको ग्राण्ड ईण्डोनेशिया डिपार्टमेण्टल स्टोर त्यहाको भव्यता िसंगापुरको आथित्यता अर्को विशिष्ठता थिए । नेपाली नागरिकहरु िसंगापुर पुलिसमा भएका कारणले पनि नेपालीहरुलाई विशिष्ट रुपमा लिने गरेको पनि हुनसक्छ । टयाक्सी कुरेर वसेका वखत गोर्खाली भगवती गुरुडसंग भेट जसले िसंगापुरमै होटल व्यवसाय गरेर वसेको कुरा खास उल्लेखनीय विषय थिए ।



सवैभन्दा अनौठो कुरा त के थियो भने नेपालीहरुको राजनैतिक विकास र उपलव्धी विश्वकै लागि उदाहरण भएको छ । अढाईसय वर्ष पुरानो राजतन्त्र विना कुनै रक्तपात विदा भएको छ । साठी वर्षदेखिको संविधानसभाको चुनाव सम्पन्न भएको छ । खासगरी माओवादीहरुको दुर दृष्टि र विचारमा वैज्ञानिकता सवैकालागि अनौठो भएको अनुभव सवैले साटासाट गरेका थिए । अझै अनौठो कुरा त के भएछ भने आईडिया ईन्टरनेशनल कै नेपाल प्रमुख लिना रिकिला तामाडसंग विदेशीहरुले नेपालवाट कति जना आएका छन् र माओवादी आएकाछन् कि छैनन् उनीहरुको लगातारको प्रश्न रहेछ । जवाफमा नेपालवाट तिनजना प्रतिनिधि आएका र त्यसमा माओवादी प्रतिनिधि पनि आएको भन्नासाथ माओवादी प्रतिनिधि को हो भनेर सेाधेछन् । त्यसपछि मलाई माओवादी भनेर देखाउदा उनीहरु छक्क परेछन् किनभने म त टाई सुटमा सजिएको थिएं । माओवादी अनि सुटेट वुटेट । उनीहरु अचम्म परेछन् । जंगलवाट आएको माओवादी अनि नेपाली माओवादी प्रतिनिधि सुट टाईमा जे होस नेपालका वारेमा माओवादीका वारेमा उनीहरुको सुनाई उनीहरुको दिमागमा भरिएको चिज विल्कुल भिन्न रहेछ । कार्यक्रमको अन्तसम्म आउदा मेरो प्रस्तुती र छलफल पश्चात प्राय सवैले मसंग भेटने परिचय गर्ने विजनेश कार्ड साटासाट गर्ने र विदा हुने प्रकृया चालु रहयो । मलाई गहिरो अनुभूति भयो कि माओवादी वारेमा विश्वभर एउटा अत्यन्त कुरुप तस्विर प्रचार गरिएको छ । त्यसलाई सशरिर उपस्थित भएर माओवादीको विचारका वारेमा पनि भ्रामक कुरा पस्किएको छ । त्यसलाई व्याख्या विश्लेषण गरेर दुनियाको चित्त वुझाउनै पर्छ । यसले मलाई एकजना माओवादी र एकजना संविधान र कानूनको विद्यार्थी पनि भएका कारणले मलाई गंभिर वनाएको छ । माओवादीका सामु चुनौति पनि हो यसको सहजताकासाथ सामना गर्न जरुरी छ । जाकार्ता भ्रमणले विषयवस्तुको वारेको अनुभव त छदै छ तर समग्र विषयमा पनि नया अनुभूति भएको छ । नया संविधान वनाउदै गर्दा नेपालले आजसम्मका अनुभवहरुको सार खिच्नु पर्ने संसारकै मोडेल संविधान वन्नु पर्ने आर्थिक संकटका कारणले राजनैतिक दर्शनको संकटलाई नै अभिव्यक्त गरेको यो घडीमा २१औ शताव्दी सुहाउदो राजनैतिक प्रणाली आवलम्वन रोज्न सक्नुपर्ने अवसर पनि हाम्रा सामु आएको छ यसलाई गुम्न दिन हुदैन भन्ने कुरा मलाई अनुभूति भएको छ ।



विदेश भ्रमण केवल रंग रमिता मात्रै हैन । यो त पहिचानको कुरा पनि हो । कस्तो पहिचान र प्रभाव छाडने र हिजो अनुमान गरिएको गलत मानसिकता र चित्र मेटन सक्ने वा त्यसैलाई पुष्टि गर्ने भन्ने पनि यतिवेलाको मुख्य प्रश्न हुने गरेको छ । मेरा लागि जाकार्ता यात्रा सुखानुभूति र प्रेरणाको श्रोत दुवै वनेको छ ।