Paper/Speech Details of Conference Program for the 20th NISPAcee Annual Conference Program Overview General Session Author(s) Donald Fuller American University of Armenia Yerevan Armenia Title Capitalism: Discontent, partial remedies, lingering doubts File Paper files are available only for conference participants, please login first. Presenter Donald Fuller Abstract Emannuel Wallerstein has long predicted the collapse of capitalism. Has it arrived in 2011/2012? The thesis will explore the negative impacts linked to the global recession among the core countries of Europe and the Americas and its impact upon the peripheral or emerging markets.. It will compare the current recession/depression with that of the 1930s. Prognoses for recovery following 2008, have not been forthcoming. Have conditions changed? Is the recession confined to the finance economy only? Have the repeal of F. Roosevelt’s legislation rendered financial regulation powerless? Considering the demise of workers’ and households’ ability to survive financially, is a new paradigm necessary to rebalance the world economy? Global economists do not agree regarding causation for the current recession. Intervening remedies have not created sufficient demand to balance large debt holdings and retarded growth performance. Time has not healed job prospects for unemployed seemingly trapped at a very low level of equilibrium. Neither the market nor government intervention appears to recapture market equilibrium. In most markets, prices are below costs of supply. Neither austerity in government budgets nor state stimulus packages designed to increase demand have rebalanced economies. The thesis will explore three structural factors that seem linked to the current financial impasse: (1) the disconnecting of labor skills from current market demands; (2) income inequality is increasing; (3) banks and shadow banks are holding large cash reserves in expectation that governments will legislate populist measures against them as well as other investors. The current descriptive phrase is that the core economies are undergoing “Japanization” (alluding to Japan’s recession of over ten years). The conventional wisdom regarding capitalism has been centered upon whether the markets have been thrown askew by governmental intervention (neo-conservatives preference for laissez-faire: free market) vs. the argument that market failures require government intervention to rebalance economies that are not entirely disconnected from political and social components of society. In democracies, both voters and special interests perennially disagree as to the causes of economic imbalances as well as the remedy. If, for example, societies wish to protect households and labor markets with government intervention, laissez faire may suffer. The thesis will not resolve differences among neo-cons and liberals. It will, however search for structural changes particularly in core economies that can impact emerging markets. While it is tempting to believe that market problems are solely economic, not only animal spirits may be at work. The result has been to demoralize many middle classes of the world and lengthen the separation of rich from poor.