The Great Recession and the Contradictions of Contemporary Capitalism
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The Great Recession and the Contradictions of Contemporary Capitalism

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.
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Chapter 4: Fictitious capital in the context of global over-accumulation and changing international economic power relationships

François Chesnais


From early August 2007 onwards, the immediate overriding concern of Western governments and Central Banks was that of fighting off the potential effects of a global financial crisis of potentially unprecedented dimension on banks, investment funds and, more broadly, all owners of financial assets. In September 2008, Wall Street was the eye of the cyclone of the crisis, the failure of Lehman Brothers bringing the global financial system close to a collapse. ‘Save the banks’ became more than ever the watchword of Western governments and Central Banks. In 2010 the hurricane zone moved to Europe. Residential mortgage-backed, collateralized debt obligations and other species of asset-backed securities (RMBSs, CDOs and ABSs) ceased to be viewed as the most highly vulnerable form of assets in the portfolios of banks and financial investment funds. Their place was taken, notably in the case of European banks, by government bonds of Eurozone member countries considered liable to default, many of which had become highly indebted largely on account of the amount of public money put into saving banks, automobile firms and building corporations in 2008. Greek government bonds led the way, but the contagion of investor qualms fueled by the Credit Rating Agencies spread suspicion about the solvency of other countries, primarily those grouped by traders under the unmistakable aphorism PIGS.

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