Abstract:
The world is witnessing an unprecedented crisis which has been termed by economists as the
‘biggest of all time’ (Krugman, 2009). The financial crisis, the consequent economic meltdown
and recession is an outfit of the dominant capitalistic business model. It is the mother and
father of the crisis because it was given all the opportunity to growth by policy makers, and it
collapsed. It has become clearer now that there is nothing like a free world market and that it
cannot alone stand out as the engine of growth of the global economy. Although the financial
crisis and its consequences are an embarrassment to capitalism, it is very clear that, if
capitalism is left unchecked, the world should expect bitter crises in the coming decades.
Krugman (2009) argues that policy makers in the industrialised countries ignored the signals of
the crisis, my position is that it was not mere ignorance, but it they were willing to give the
capitalist business model chance of supremacy without recognition that the economy was left
to the vulnerability of the ‘shadow’ and unregulated banking sector where trillions of dollars
were tied up in long term non-performing assets (Krugman, 2009).
