Market instability in the context of "Reformism"

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⭐ Core Definition: Market instability

Criticism of capitalism typically ranges from expressing disagreement with particular aspects or outcomes of capitalism to rejecting the principles of the capitalist system in its entirety. Criticism comes from various political and philosophical approaches, including anarchist, socialist, religious, and nationalist viewpoints. Some believe that capitalism can only be overcome through revolution while others believe that structural change can come slowly through political reforms. Some critics believe there are merits in capitalism and wish to balance it with some form of social control, typically through government regulation (e.g. the social market movement).

Prominent among critiques of capitalism are accusations that capitalism is inherently exploitative, alienating, unstable, unsustainable, and creates massive economic inequality, commodifies people, is anti-democratic, leads to an erosion of human rights and national sovereignty while it incentivises imperialist expansion and war, and that it benefits a small minority at the expense of the majority of the population. There are also criticisms from environmental scientists and activists, leftists, degrowthers and others, that it depletes resources, causes climate change, biodiversity loss, topsoil loss, eutrophication, and generates massive amounts of pollution and waste.

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Market instability in the context of New Deal

The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression, which had started in 1929. Roosevelt introduced the phrase upon accepting the Democratic Party's presidential nomination in 1932 before winning the election in a landslide over incumbent Herbert Hoover, whose administration was viewed by many as doing too little to help those affected. Roosevelt believed that the depression was caused by inherent market instability and too little demand per the Keynesian model of economics and that massive government intervention was necessary to stabilize and rationalize the economy.

During Roosevelt's first hundred days in office in 1933 until 1935, FDR introduced what historians refer to as the "First New Deal", which focused on the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reforms of the financial system to prevent a repeat depression. Roosevelt signed the Emergency Banking Act, which authorized the Federal Reserve to insure deposits to restore confidence, and the 1933 Banking Act made this permanent with the Federal Deposit Insurance Corporation (FDIC). Other laws created the National Recovery Administration (NRA), which allowed industries to create "codes of fair competition"; the Securities and Exchange Commission (SEC), which protected investors from abusive stock market practices; and the Agricultural Adjustment Administration (AAA), which raised rural incomes by controlling production. Public works were undertaken in order to find jobs for the unemployed (25 percent of the workforce when Roosevelt took office): the Civilian Conservation Corps (CCC) enlisted young men for manual labor on government land, and the Tennessee Valley Authority (TVA) promoted electricity generation and other forms of economic development in the drainage basin of the Tennessee River.

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