Itoh, Makoto “Theoretical Possibilities of Socialist Market Economy and the Chinese Road” ponencia en la Memoria del Séptimo Congreso Mundial de la Worl Asociation of Political Economy efectuado en la Universidad Autónoma Metropolitana Xochimilco México los días 26 y27 de mayo de 2012.
Capitalist market economy has intensified global activity of multinational interprises upon the ground of micro-electronic information technologies in the process of prolonged downswing and restructuring since 1973. In accord with this trend, neo-liberalism has become dominant since the 1980s, and emphasized rational efficiency of competitive market economy, by reducing the economic roles of the states, privatizing public enterprises, and weakening the trade unions. The systemic changes after the East European Revolutions in
1989 and the dissolution of the USSR in 1991 proceeded under a strong influence of such neo-liberalism, and took the American model of capitalist market economy for the de fact global standard. The neo-classical mainstream economics has served as an ideological basis for such a trend in the world.
Globalization of capitalist market economy, however, has not realized the economic efficiency and the harmonious distribution against expectation of neo-liberalism and neo-classicism. For instance, Japan, one of major capitalist economies, is suffering from a severe depression following the burst of speculative bubble economy at the end of 1980s, with growing unemployment continuously through and after the lost decade in the 1990s. Not a few of surrounding Asian countries also experienced a heavy blow of the collapse of bubble resulting in the monetary and financial crises in 1997-78. The ‘new economy’ boom in the USA had to end with the downfall of bubbly stock market and came into a phase of depression after autumn of 2000, which was further accentuated by the break down of World Trade Center on September 11, 2001. The economic recovery during 2002 and 06 in the USA depended heavily on the housing boom promoted by financialization of labour-power, and eventually resulted in the sub-prime world economic crisis (as I analyzed in Itoh 2010), which was transformed further into the sovereign crisis of the major advanced economies. It is evident that the deregulated free capitalist market economy under neo-liberalism has intensified financial nstability with disastrous effects on the economic life of working people.
Neo-liberal globalization of capitalist market economy thus cannot be judged successful in achieving stable, efficient and prescribed harmony in the advanced economies. Actually increasing inequality of income and wealth both domestically and globally, as well as poverty and starvation in not a few peripheral developing countries, is so difficult to find a hopeful way out in the current world economy.