DEFINITION OF ECONOMIC SYSTEM OF CAPITALISM
Capitalist economic system is essentially an all rules of community life, including in the economic field, it is not derived from religion but left entirely to humans, what is considered beneficial. With the benefit principle (naf’iyyah) this is a good material that provides maximum benefit to human size and the bad is the opposite. So that the happiness in this world is nothing but the fulfillment of all material needs, whether it is material that can diindera and feel (good) or who can not but be felt diindera (services).
Economic Characteristics of Capitalism: (CIRI-CIRI)
- Broad recognition of individual rights where ownership of the means of production in the hands of individuals and Inidividu free choice of employment / business are considered good for him.
- Economy governed by market mechanisms where markets function provides “signals” kepda producers and consumers in the form of prices. Sought government intervention as small as possible. “The Invisible Hand” is set to be an efficient economy. The motive that drove the economy for-profit
- Human beings regarded as homo-economicus, which is always pursuing their own interests. Based individualism and materialism, heritage ancient Greece (called hedonism).
- More efficient in utilizing resources and distribution of goods.
- Creativity of the community is high because of the freedom to do everything that the best himself.
- Political and social supervision minimal, because the labor time and cost less.
- There is no perfect competition. That there is imperfect competition and monopolistic competition.
- Price system fails to allocate resources efficiently, because of the externality factors (not taking into account the pressing labor costs and other
The crisis that hit the United States began to appear from the stock index slumped sharply. A number of giant financial companies went bankrupt world. Home loan companies Fannie Mae and Freddie Mac debt warrants worth 5.3 trillion dollars or more than half of home loan debt in the U.S. collapsed.
At the end of his term, President George W. Bush must berjibaku save the two companies with cash poured money from its citizens tax of 200 billion U.S. dollars. Not only that, Lehman Brothers, one of the largest U.S. investment banks are also out of business. This is the final fate of the largest and oldest bank founded in 1844. Whereas in 2007, Lehman was reported total sales of 57 billion U.S. dollars. Even in March and Business Week magazine had time to place the company as one of the top 50 companies in 2008.
Other investment companies, like Merrill Lynch, who for years had become a giant Wall Street, also the same fate. Similarly, AIG, one of the largest insurance company, which pleaded for emergency funds injected 40 billion U.S. dollars from the U.S. government to avoid total bankruptcy. Magazine Wall Street Journal called it with the words, “the American financial system was shaken to the navel.”
As a result of the crisis, some financial institutions that do not lose a bit; in the United States reached 300 billion U.S. dollars, whereas in other countries is estimated to 550 billion U.S. dollars.
To overcome the crisis, a number of countries, including the U.S., began poured billions of dollars into the capital markets. The way it is considered able to support the market and liquidity backup in order to move economic activity. There is even some direct intervention to the level of nationalization of some banks, as happened in England.
The cause of the economic crisis the country is the accumulation of Uncle Sam’s national debt reached 8.98 trillion U.S. dollars, reducing corporate taxes and the swelling cost of wars in Iraq and Afghanistan. The most crucial is the subprime mortgage, the loss of property securities that bankrupted Lehman Brothers, Merryl Lynch, Goldman Sachs, Northern Rock, UBS and Mitsubishi UF.
The crisis that hit the U.S. is sharply highlighted by the mass media in Europe, as quoted in Pinara.net. For example, the Italian daily La Republica, published in Rome, commented, “We have a recession hit the United States a very serious and painful. Now the question is, how bad this crisis phase, and whether it will be able to undermine the U.S. economy suddenly?”
Further daily football country revealed, the European community, especially the European Central Bank, knew it was an illusion and still expect the region was still able to protect or ward off the impact of severe economic crisis in the United States. However, in the crisis in 2008, Europe will no longer be able to withstand the impact of the economic crisis of the United States and will join crushed.
French Daily dernières Nouvelles d’Alsace which was published in Strassburg also commented on the sharp economic crisis the world. “In Germany, trade unions demanding pay rises to 8 percent to offset the purchasing power continues to decline. In France the decline in purchasing power is also a topic of discussion.”
The paper states, in fact declining purchasing power is not just a matter of France, but also experienced by all European countries. As a result, economic growth corrected downwards. “The credit crisis in the United States shows just how vulnerable the monetary globalization,” the daily wrote.
The impact of global crisis was also felt German. Daily circulation in Germany, Der Tagesspiegel, published in Berlin commented, “If not all the fears become reality, now look how bad the German preparations to face a decrease Konjunktur … State could no longer restore the ability to act. Politics as a whole failed to take advantage of the speed Konjunktur. health insurance, retirement funds and foundations labor market is no longer immune from the crisis. “
Media glare that is evidence that the economic crisis this time receive the effects is very large. Fear of a greater crisis now enveloped almost as big countries in the world.