The Global Financial Crisis (hereinafter the Crisis) has been the most significant financial disaster of the twenty-first century thus far. With hindsight, it is possible to isolate the causes of the crisis and so be able to gauge the responses of political thinkers. As the most severe financial crisis since the Great Depression, it was natural that the political responses of the time would be both highly important and highly controversial.
In order to understand the causes of the crisis, one must first understand the progression of the crisis itself. Although there were undoubtedly a multitude of underlying causes over the preceding decades, the most obvious warning sign for the upcoming Crisis occurred on 9 August 2007 when BNP Paribas, …show more content…
As a humanist and organicist, Hobson felt strongly that there was a link between the psychological and physiological aspects of human behaviour, and hence that the environment a person existed in was fundamental to their actions and behaviours. Because of this, Hobson was intrinsically opposed to any policy which did not improve the wellbeing of the individual and the society, such as unemployment and increasing inequality. Hobson firmly believed in the fundamental ideal of intrinsic altruism, that people would, in the absence of all other factors, instinctively desire to improve the welfare of others. From this, he developed his belief, based on the Marxian creed that everything should be distributed “from each according to his ability, to each according to his needs”. Whilst this seems to imply a strict form of socialism, Hobson defined ‘needs’ as the requirements for any individual to be productive, implying not complete equality but instead complete equity, a crucial distinction which explained his demand for a minimum standard of living rather than a standard allocation of income to …show more content…
If the main source of money was previous receipts, as Hobson believed, he felt that there would be no inflationary pressures from increasing the money supply. However, if the money supply was increased by either printing money or taking out new bank credits, Hobson felt that there was potential to increase prices if production of goods was not increased to keep pace with demand. Because of this, Hobson would likely have held concerns about firstly the source of the money for the fiscal stimulus, as a fiscal stimulus of such magnitude would create material changes in the supply of money in the economy, and secondly regarding the magnitude of the investment, as it must be sufficiently large to counteract the loss of production from the Crisis, with enough additional investment to counteract inflation, without being so large as to result in excess supply which, as mentioned earlier, Hobson believed could exacerbate
In order to understand the causes of the crisis, one must first understand the progression of the crisis itself. Although there were undoubtedly a multitude of underlying causes over the preceding decades, the most obvious warning sign for the upcoming Crisis occurred on 9 August 2007 when BNP Paribas, …show more content…
As a humanist and organicist, Hobson felt strongly that there was a link between the psychological and physiological aspects of human behaviour, and hence that the environment a person existed in was fundamental to their actions and behaviours. Because of this, Hobson was intrinsically opposed to any policy which did not improve the wellbeing of the individual and the society, such as unemployment and increasing inequality. Hobson firmly believed in the fundamental ideal of intrinsic altruism, that people would, in the absence of all other factors, instinctively desire to improve the welfare of others. From this, he developed his belief, based on the Marxian creed that everything should be distributed “from each according to his ability, to each according to his needs”. Whilst this seems to imply a strict form of socialism, Hobson defined ‘needs’ as the requirements for any individual to be productive, implying not complete equality but instead complete equity, a crucial distinction which explained his demand for a minimum standard of living rather than a standard allocation of income to …show more content…
If the main source of money was previous receipts, as Hobson believed, he felt that there would be no inflationary pressures from increasing the money supply. However, if the money supply was increased by either printing money or taking out new bank credits, Hobson felt that there was potential to increase prices if production of goods was not increased to keep pace with demand. Because of this, Hobson would likely have held concerns about firstly the source of the money for the fiscal stimulus, as a fiscal stimulus of such magnitude would create material changes in the supply of money in the economy, and secondly regarding the magnitude of the investment, as it must be sufficiently large to counteract the loss of production from the Crisis, with enough additional investment to counteract inflation, without being so large as to result in excess supply which, as mentioned earlier, Hobson believed could exacerbate