||The expansion of the global economy’s financial sector in the context of relative productive sector stagnation tendencies can be read as a classical overaccumulation crisis.
This paper considers the way leading powerbrokers reacted to the crisis through ‘devalorization’ of large parts of the Third World alongside the write down of selected financially volatile and vulnerable markets in the North (e.g. dot.com, real estate and other derivatives bubbles). In contrast to the 1930s, this set of partial write-downs of financial capital – kept in check by slap-dash systemwide repairs in late 2008 and 2009 – did not create such generalized panic and crisis contagion as to erode the entire system’s integrity, although October 2008 was a month in which that threat rose to extreme levels.
The ‘shifting and stalling’ of the devalorization of overaccumulated capital meant that most major Northern financial institutions survived.
But they did so through intensified extra-economic coercion, including gendered and environmental stresses. The result is a world economy that concentrates wealth and poverty in more extreme ways, geographically, and brings markets and the non-market spheres of society and nature together in a manner adverse to the latter. Is reform of the system possible? If so, ideas for revitalized multilateral financial institutions, following Keynes’ International Clearing Union proposal, are worth revisiting, as is a global Tobin Tax, generalized capital controls, and the Brazil-Russia- India-China-South Africa ‘New Development Bank’ which is to be launched at the 2014 BRICS heads-of-state summit in Fortaleza.
However, what such ideas ‘from above’ require for consideration – if they are to transcend renewed crisis conditions – are extremely powerful social movements ‘from below’ which change the relationship between civil society, state and financiers. If done properly, such movements can use reform-advocacy exercises that are inconceivable in current circumstances both to contest the slap-dash character of elite strategies and to envisage post-capitalist options for a very different domestic and global financial system.