The capitalist world was said to be facing a crisis of its economy from 1973. What was manifestation of that crisis and what were the causes?

Capitalist word include those countries that practice capitalism as a mode of production such as capitalist world include united states of America (USA) Britain, Japan, Canada, Netherlands, France Poland and New Zealand. According to Karl Marx capitalism is made of production based on private ownership of means of production[1]. According to max weber capitalism is an economic system or activity which was oriented on making profit and expenses in terms of money[2]. Adam smith defined capitalism as an Economic and social system in which capital and non- labour factor of production or means of production are private controller[3]. Capitalist world economy can be defined as a system that involves a hierarchical and a spatial in quality of distribution based on the concentration of certain kinds of production in certain limited zones, which there upon and there by become the loci of the greatest accumulation of capital[4] and further Immanuel Wallerstein argued that capitalist word system need to maximize profit. We conclude that capitalist world are those countries that practices capitalism as a mode of production where an economic are controlled by private sectors (bourgeoisies) for profit making. Capitalism characterized by private property and freedom of ownership, it arises class conflict, consumers sovereignty and non-government intervention in business.

Crisis; Is an unstable situation in political, social, economic and military affairs especially one involving on impending abrupt change.

According to Alan Kirman defined the economic crisis is a breakdown of a national, religion or territorial economy that typically follows a time of crisis an economic collapse occurs at the onset of a serve version of an economic contractions, depression or recession and can last any number of years depending on the severity of the circumstances. An economic crisis can happen rapidly due to unexpected event or it may be preceded by several events or sign pointing to fragility in the economy[5]. Therefore we conclude that economic crisis is a severe and sudden upset in any part of the economy. It could be a stock market crash, a spike in Inflation or unemployment or a series of bank failures. They have severe effects even though they don’t always to a recession and economic crisis has impact on all spheres of life such as socially, politically and economically.

After the second world war the world experienced crisis that shaked the world economy where by from 1973 the capitalist world like united states of America, Britain, Netherland, Canada, South Africa, france Poland, Australia and new Zealand, Japan. It is true that faced an economic crisis that contributed by a lot of factors (causes) and its manifestations as follow.

The following are the manifestations of that capitalist world economic crisis from 1970’s

Collapse of Banks. During the time of crisis several banks proved collapse for example in 1973 to 1974 franklin Bank of new York collapsed due to low investment particular in Banks. Simply because production was very low and what produced would to be sold with high price so many capitalist especially small one proved collapse at the end of the day the bank proved collapse. That associated with decline of Bretton woods monetary system, ended 1974 and Bretton woods system was a set united rules and policies that provided the framework necessary to create fixed international currency exchange rates essentially the agreement called for the newly IMF to determine the fixed rate of exchange for currencies around the world, hence after crisis the banks collapsed[6].

Devaluation of currency in 1970’s the Nixon administration devalued the US dollar with the regard to the farmer dependence on Gold standard as measurement of value of the currencies. The value of gold dropped which they decided to devalue their currency[7]. This was a sign of capitalist crisis since a country devalues its currency once its balance of payments is negative. During that period US was experience inflation of 5.84% surcharges in imports also US had on unemployment rate of 0.1% this shows that US capitalism was experiencing a crisis which led to devalue the US dollar so as it can get positive terms of the trade

Underproduction of industries and Agricultural sectors. Due to the fact OPEC make embargo or prohibited the supplier of crude oils which used as a source of fuels in industries for more production of goods but become shortage hence industries in Britain, Finance Germany US and other failed to produce quality goods and therefore industries produced low production. For instance in Germany British and france also Agriculture sector because low due to there were no good relation to industries for capital compensation[8] and Agriculture sector declined due to shortage of oils used in machines like Tractors, hence shortage of oils as actions of OPEC led to decline in industries and Agriculture production.

High rate of inflation This was economic crisis in 1973 for example in 1973 a house cost $ 32,500 with an average family income of $12,900 an average house in 1973 approximately 2.5 times also the price of oil increase as the results of oil crisis at middle east hence people used a lot of money to brought oil in order to facilitate transport especially private owner of cars all this things raised the living standard of people at that time compare to the past time before economic crisis.[9] Where by during the recession the gross domestic product of USA fell 3.2% and recession also lasted from 1973 to 1975 in the united Kingdom. The GDP declined by 3.0% or 3.37% depending on the source.

Unemployment, This is a term that referred the situation where by majority within a countries are jobless either due to poor economic status of the country or government policy. during the economic crisis in 1973 – 1974 stock market crash made recession evidence[10]. The US Bureau of labour statistics estimates that 2.3 million jobs were lost during the recession at the time this was a past war record although the recession ended in march 1975. For stance in Japan many people suffered with the problem of unemployment. An example 3.6 people of Japan suffered from situation of unemployment due to economic crisis.

Balance of payment problems European countries imported more and exported little goods within their nation and also they consumed more than to produce. Therefore due to this problem the developed countries formed different policies to overcome problems for instance British formulated policy called Magret carter in 1979 to overcome the problems of payment. Through cost sharing and elimination of subsides in Agriculture. All this policy was to ensure there is a balance of payment to those employed simply the economy was in the era of shaking.