Contemporary Social Theory And Crises Of Capitalism In The United States

Theoretical Course Concept in Context of Contemporary Capitalism

Topic: Crisis of Capitalism in Relation to the Election of Donald Trump Paper

According to capitalists, free markets are the most efficient way of organizing the society. Consequently, they argue that markets are not only effective tools in the allocation of resources, but also ensure that individual rights are protected in the process. Markets, in this case, if unregulated are believed to promote economic growth and efficiency, while ensuring the proper distribution of income since they reflect every individual’s influence on the economy. Concurrently, a softer form of capitalism, which sources also describe as liberal democracy or a mixed economy, recognizes the significance of markets, while agreeing with the need for government involvement in remedying market failures and addressing distributional concerns (Graham, 2018). This kind of economy was significantly dominant worldwide during the three decades after World War II. In the United States, the mixed economy was supported by Bill Clinton’s administration in the 1990s, as well as by Obama during the 2000s. Thus, a crisis of capitalism would ensue in a bid for national restructuring and the formation of policies that regulate capitalism. Prior to Donald Trump’s election, while Sanders advocated for a left-wing answer to the crisis of capitalism that was founded on social democracy and a better welfare state, Trump stood for a right-wing resolution founded on isolationist protectionism for which he believed would put the interests of the American citizen at the forefront (Barro & Jason, 2018). This essay maintains that the election of Donald Trump led to a spike in inequality as well as a government focused only on enhancing business and pleasing the wealthy class. Trump’s election, as the essay argues, is the contemporary topic and root cause of the crises of capitalism in the United States.

According to many Americans, technology and free trade are believed to be the main cause for unemployment and stagnant earnings. In keeping with the concept of capitalism, social theory explains that the benefits of technology and free trade are less recognized since their use surpass the costs, thereby hurting a majority in the process. Capitalism assumes that winners recompense losers, thus those residing in declining communities may eventually move to more thriving areas (Fisher, 2009). However, in the United States, winners are prospering whereas losers have to contend with unemployment, community decline and high suicide rates, as well as the increased lack of trust in the government. Therefore, crises of capitalism ensued since losers and winners both elected President Donald Trump in 2016 because he vowed to restructure trade and immigration, not using economic adjustment, but rather with different tariffs and a wall (Hacker & Paul, 2016). In turn, his administration has stagnated free trade and technology since it propagates status anxiety and cultural division. Counter-reactions to his administration has led to crises of capitalism and populist movements all geared towards altering his political norms, and the upholding of income-related democratic values (Monbiot, 2017).

Mixed Economy and Crisis of Capitalism under Trump

Other than the consequences of free trade and technology, the need for faster economic growth continues to influence policies both on the right and left. While the left base their agenda on increased investment in inquiry, learning, and infrastructure, the right place their emphasis on supply-side policies, such as, lower tax rates, deregulation, and more fiscal accountability. With previous intentions of improving economic growth, supply-side policies were also applied during Reagan and Bush’s administration, though with little evidence suggesting an increase in growth in the long-run (Thaler, 2016). While economists agree that tax cuts may prove beneficial as purported by the Keynesian theory, the social theory suggests that the economy may only experience growth in the short term. This is due to the fact that high unemployment rates also cause economic stagnation. Similarly, since the lower tax rates have been facilitated by further accumulation of national debt, many other economists also agree that long-term economic growth may eventually be limited (Duménil & Dominique, 2011). This is because increased debt results in spiked borrowing costs in all market sectors. Additionally, since a significant amount of the national debt is acquired from foreign countries, any rise in production or income within the country will have to be reserved so as to repay all loans and interests. Although, as economists also believe, the new tax law implemented in 2017 may have a positive effect on the economy, long term growth rates may not surpass the one percentage point initially projected by President Trump. Hence, despite Trump’s economic policies, the economy may not be able to sustain the national community in the long-run. In turn, this has sparked unrest among losers because it indicates the character of misappropriation at the expense of the lower class societies (Piketty, 2014).

More troubling than poor economic growth is the ever-increasing levels of inequality in the United States under Trump’s rule. Inequality, if left unchecked may continue to influence other market forces in opposition to the country’s economic health. For example, according to contemporary social theory, unequal wage gaps continue to enable the rich to accumulate more money than other lower classes, resulting in a build-up of capital among the wealthy. This accumulation spikes more inequality because while the poor are struggling to make ends, meet, the rich merely profit from the gains of their mounting financial assets (Galston, 2018). Similarly, during the 2016 elections, Trump and his team believed that the root cause of economic stagnation in America was the immigrants. The voicing of this alleged issue implied that immigrants were of lesser value as compared to other citizens. Consequently, at the very start of his administration, President Trump announced three executive directives, all of which either resulted in deportation of immigrants, or a restriction of their entry into the country. Sociologists refer to this act as a nativist social concept which automatically worsened the rift between American citizens, and arguably tipped the capitalist game against the lower class society. Ultimately, Trump’s administration has not only widened wage gaps as a result of poor economic growth, but also put in place anti-competitive measures to favor capital, all of which may soon intensify crises in capitalism (Galston, 2018).

Conclusion

Trump’s election has led to crises in capitalism, all of fight against his critique of the importance of democracy. His administration suggests that the government has been influenced by the business prospects of the wealthy few, thereby encouraging inequality, poor economic growth, and unfair market competition. Additionally, Trump’s election and their comprehension of capitalism has intensified the levels of inequality among inhabitants owing to his endeavors to maintain income and wealth among the wealthy class. Hence, the current capitalist system in the United States is not self-correcting, but rather embodies a supply-side political system that only benefits those with a large supply of money. The outcome has created political institutions believed to be a threat to democracy, thereby propagating the onset of crises that hope to end the process (Eribon, 2013). A potential research issue raised by the essay concerns the potential risk of severe capitalism on more contemporary versions of capitalist economies. Similarly, as a research question, if one approves of this analysis of a contemporary capitalist system, what efforts could be made to ensure a reprioritization of general fairness and success?

References

Barro, R., & Jason, F. (2018). Economic Activity: Macroeconomic effects of the 2017 tax reform. Washington, DC: Brookings Papers.

Duménil, G., & Dominique, L. (2011). The Crisis of Neoliberalism. Cambridge, MA: Harvard University Press.

Eribon, D. (2013). Returning to Reims. Los Angeles, CA: Semiotext.

Fisher, M. (2009). Capitalist Realism: Is There No Alternative? . Winchester: Zero Books.

Galston, W. (2018). Anti-pluralism: The Populist Threat to Liberal Democracy. New Haven: Yale Univesity Press.

Graham, C. (2018). Chapter 4. In I. Sawhill, Happiness for All? (pp. 54-77). Princeton, NJ: Princeton University Press.

Hacker, J., & Paul, P. (2016). American Amnesia (2 ed.). New York: Simon and Schuster.

Monbiot, G. (2017). Out of the Wreckage: A New Politics for an Age of Crisis. New York: Verso.

Piketty, T. (2014). Capital in the Twenty-first Century. MA, Harvard: University Press.

Thaler, R. (2016). Misbehaving: The Making of Behavioral Economics. New York: W.W. Norton and Company.