SOCIOL 1 Chapter Notes -Investment, Financialization, Collateralized Debt Obligation

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Ch 9 - the global collapse: a non-orthodox view. Golden age of contemporary capitalism - 1945-1975. rapid growth of central and underdeveloped economies due to reconstruction post wwii. Increased global competition; income inequality within and between countries limit growth of purchasing power / demand. Removing state constraints on growth, flow and use of capital wealth. Redistributing from poor / middle classes to the rich in hopes that the rich can invest in economic growth. Gutting incomes of poor/middle classes restricts demand; rich not motivated to invest. Accumulation of capital through finding cheaper labour, raw materials; expanding infrastructure into new areas. This exacerbates the problem of overproduction by increasing prod. capacity. Leads to drop in prices and therefore profits. Large amounts of surplus funds circulate and reinvested in financial sector. Bifurcation between hyperactive financial economy and stagnant real economy skyrocketing) Tantamount to squeezing value out of already created value. Profit not based on value investments become volatile (stocks, bonds, etc. )

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