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Research Article Open access CC BY 4.0

From Hegemony to Harmony: Evolution of Economic Theories in Response to Global Shifts

Yiwei Wang

Asian Journal of Economics, Business and Accounting · pp. 625–633 · Published 25 Jul 2024

10.9734/ajeba/2024/v24i71435

Abstract

This paper explores the evolution of economic theory in response to historical events and societal needs, focusing on the shift in attitudes toward planned economies. It argues that the changes in economic thought are micro-level reflections of macro-level trends. In the 20th century, major global events such as the rise and fall of Soviet socialism, the decline of British hegemony, and the ascendancy of American dominance shaped the trajectory of economic theories. The study examines how capitalism adapted to socialism through government intervention and eventually reverted to liberalism after the socialist experiment's failure. This paper also draws parallels between past and present geopolitical and economic dynamics, highlighting the similarities between early 20th-century British-German relations and current U.S.-China tensions. It discusses how China's response to U.S. protectionism and the need to craft a unique economic narrative are crucial in this context. Furthermore, the study critiques the extremes of planned and laissez-faire market economies, advocating for a balanced approach that integrates free market principles with government intervention. It underscores the importance of developing new economic theories that reflect China's unique experiences and can guide future development both domestically and globally. Finally, this paper calls for innovative theoretical frameworks to better describe the government's role in economic operations, emphasizing the need for China to assert intellectual leadership in the field of economics to avoid Western dominance and ensure the discipline's relevance to contemporary challenges.

Economic theory planned economy government intervention capitalism vs. socialism 20th century economic history

References (10)

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