The Politics of Recession

The Politics of Recession

Maurice Mullard

This timely book utilises the tools of politics, economics and public policy to explore the causes of the recent global financial crisis, which, the author argues, can be explained as the absence of a public interest perspective in policy making.

Chapter 7: Structural Explanation of the Financial Crisis

Maurice Mullard

Subjects: politics and public policy, public policy


The financial crisis has confirmed the contradictions between capitalism and democracy. Capitalism needs democracy since the process of democracy gives legitimacy to the economy. The revolutions in the Middle East of 2011 confirm the limitations of autocratic capitalism, of a concentration of elites and growing income inequalities. The financial crisis is also evidence of growing income inequalities in the advanced economies: of stagnant incomes for 99 per cent of the population and a skewed income distribution towards the top 1 per cent of earners. The dual ethics of a capitalism of one dollar, one vote, and a democracy of one person one votes has resulted in the ability of those on high incomes to hire lawyers and accountants that ensure tax breaks for a few, and also a process that is shaped by financial donations and lobbyists and which undermines the democratic process. In the context of these contradictions this chapter seeks to explore social structures, ideology, power and influence and how these processes provide a framework for analysing the nature of the financial meltdown. It is therefore an attempt to provide an interdisciplinary approach, borrowing concepts from sociology, politics, economics and anthropology to try and locate the financial crisis in wider social, political and economic landscapes. Social structures, including institutions of government and private sector entities, by their nature create issues of power and influence. Looking at the financial sector, with investment banks worth twice UK GDP and in the USA the top five Banks amounting to 65 per...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information