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The 2007/2008 financial crisis has destroyed the illusion of who believes that capitalism would be able to reduce inequality within industrialized country. The optimism of post II World War has been demolished by the economic decadency of middle classes in developed countries. It is undeniable that international living standards have been dramatically improved over time. However, the crucial question is if capitalism - as system of production and social relationships - has been able to redistribute more equally its wealth. If yes, is this process due to specific circumstances or due to capitalism nature?
Austerity policies have been presented as the only paradigm able to solve the current economic crisis. This paper will try to show that neoclassical theories on unemployment are not supported by solid empirical evidence. The case study of Great Britain during the Great Depression to prove that (i) unemployment is not voluntary and (ii) public subsidies do not increase opportunistic behaviours.
According to economists of neoclassical inspiration, foreign payments imbalances should not cause concern because they lead to a devaluation of the currency which will restore equilibrium in the medium-long run. Recent studies on the effects of devaluation show that this argument is questionable and that redistributive effects tend to depress domestic demand. The growing deficit in foreign payments may therefore be one of the main factors that drove part of the British public to vote to leave the European Union.