Capitalism Freezes in Worldwide Winter of Discontent

bloomberg.com/apps/news?pid=20601109&sid=aNufFjNjv01k&refer=home

I did not post this to rail on “capitalism” or support “socialism.”

Among the possible outcomes: instability in Pakistan, a more aggressive if economically stricken Iran, a collapsing Somalia, civil disorder in copper-dependent Zambia, a strengthened, drug-financed insurgency in Colombia and a more warlike North Korea.

On Nov. 25, Pakistan clinched a $7.6 billion International Monetary Fund bailout to avert a debt default amid ebbing growth and an inflation rate of 23 percent in December that is ruining the livelihoods of its poor

It’s the failed or failing states that stand to lose the most. “The punch line: Poverty does cause violence,” says Raymond Fisman, a professor at Columbia Business School in New York. Researchers led by Edward Miguel of the University of California have even quantified it: a 5 percent drop in national income in African countries increases the risk of civil conflict in the following year to 30 percent.

The frailest nations are those concentrated south of the Sahara desert, plagued by a legacy of despotism, corruption, disease and economic misfortune – often all at once. The region accounts for seven of the top 10 countries in a ranking of “failed” states compiled by the Fund for Peace, a Washington- based research group.

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