The Great Recession and the Contradictions of Contemporary Capitalism

The Great Recession and the Contradictions of Contemporary Capitalism

New Directions in Modern Economics series

Edited by Riccardo Bellofiore and Giovanna Vertova

The current crisis is one of the great crises punctuating the long history of capitalism, and to be properly understood it is vital to take into account its ongoing structural transformation. This book offers plural perspectives on the Great Recession, placing the analysis of finance, class and gender at the center of the debate. It begins with a comprehensive insight into the crisis, before moving on to focus on debt, asset inflation and financial fragility. Following chapters discuss global imbalances, structural monetary reform and the management of public finance, including a investigation of the Italian experience. The book concludes with novel contributions on the gender dimension of the crisis and the analogies between a nuclear and financial chain reaction.

Introduction

Riccardo Bellofiore and Giovanna Vertova

Subjects: economics and finance, money and banking, post-keynesian economics

Extract

According to The Telegraph, ‘During a briefing by academics at the London School of Economics on the turmoil on the international markets the Queen asked: “Why did nobody notice it?”’ That the mainstream(s) failed, and that capitalism was put into question, was an opinion widely shared for a few years after the 2007 subprime crisis, and the more so after Lehman Brothers collapsed in September 2008. So much so that The Financial Times, and even The Economist, had articles and series on the crisis in economics and the future of capitalism. We say mainstreams, using the plural, because the failure was equally distributed between freshwater and saltwater macroeconomics, as Paul Krugman calls them – between Chicago monetarism and new classical macro, and Harvard new Keynesian macro, as we knew them. The country where we live and teach, Italy, is an exception to this, since even to politely ask these questions raises the suspicion of some nostalgia for real socialism or of lobbying for unproductive State employees (as happened to one of us who edited a special supplement on the crisis).