The 2008 financial crisis and neoclassical economics
The 2008 global financial crisis was the consequence of the process of financialization, or the creation of massive fictitious financial wealth, that began in the 1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on self-regulated and efficient markets. Although capi...
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| Format: | Article |
| Language: | English |
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Editora 34
2010-03-01
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| Series: | Brazilian Journal of Political Economy |
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| Online Access: | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572010000100001 |
| _version_ | 1811330543520841728 |
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| author | Luiz Carlos Bresser-Pereira |
| author_facet | Luiz Carlos Bresser-Pereira |
| author_sort | Luiz Carlos Bresser-Pereira |
| collection | DOAJ |
| description | The 2008 global financial crisis was the consequence of the process of financialization, or the creation of massive fictitious financial wealth, that began in the 1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on self-regulated and efficient markets. Although capitalism is intrinsically unstable, the lessons from the stock-market crash of 1929 and the Great Depression of the 1930s were transformed into theories and institutions or regulations that led to the "30 glorious years of capitalism" (1948-1977) and that could have avoided a financial crisis as profound as the present one. It did not because a coalition of rentiers and "financists" achieved hegemony and, while deregulating the existing financial operations, refused to regulate the financial innovations that made these markets even more risky. Neoclassical economics played the role of a meta-ideology as it legitimized, mathematically and "scientifically", neoliberal ideology and deregulation. From this crisis a new capitalism will emerge, though its character is difficult to predict. It will not be financialized but the tendencies present in the 30 glorious years toward global and knowledge-based capitalism, where professionals will have more say than rentier capitalists, as well as the tendency to improve democracy by making it more social and participative, will b e resumed. |
| first_indexed | 2024-04-13T16:04:45Z |
| format | Article |
| id | doaj.art-b4aa8797cf9e419cba6d81aca2f69ebe |
| institution | Directory Open Access Journal |
| issn | 0101-3157 1809-4538 |
| language | English |
| last_indexed | 2024-04-13T16:04:45Z |
| publishDate | 2010-03-01 |
| publisher | Editora 34 |
| record_format | Article |
| series | Brazilian Journal of Political Economy |
| spelling | doaj.art-b4aa8797cf9e419cba6d81aca2f69ebe2022-12-22T02:40:26ZengEditora 34Brazilian Journal of Political Economy0101-31571809-45382010-03-01301032610.1590/S0101-31572010000100001The 2008 financial crisis and neoclassical economicsLuiz Carlos Bresser-PereiraThe 2008 global financial crisis was the consequence of the process of financialization, or the creation of massive fictitious financial wealth, that began in the 1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on self-regulated and efficient markets. Although capitalism is intrinsically unstable, the lessons from the stock-market crash of 1929 and the Great Depression of the 1930s were transformed into theories and institutions or regulations that led to the "30 glorious years of capitalism" (1948-1977) and that could have avoided a financial crisis as profound as the present one. It did not because a coalition of rentiers and "financists" achieved hegemony and, while deregulating the existing financial operations, refused to regulate the financial innovations that made these markets even more risky. Neoclassical economics played the role of a meta-ideology as it legitimized, mathematically and "scientifically", neoliberal ideology and deregulation. From this crisis a new capitalism will emerge, though its character is difficult to predict. It will not be financialized but the tendencies present in the 30 glorious years toward global and knowledge-based capitalism, where professionals will have more say than rentier capitalists, as well as the tendency to improve democracy by making it more social and participative, will b e resumed.http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572010000100001financial crisisneoliberalismderegulationfinancializationpolitical coalition |
| spellingShingle | Luiz Carlos Bresser-Pereira The 2008 financial crisis and neoclassical economics Brazilian Journal of Political Economy financial crisis neoliberalism deregulation financialization political coalition |
| title | The 2008 financial crisis and neoclassical economics |
| title_full | The 2008 financial crisis and neoclassical economics |
| title_fullStr | The 2008 financial crisis and neoclassical economics |
| title_full_unstemmed | The 2008 financial crisis and neoclassical economics |
| title_short | The 2008 financial crisis and neoclassical economics |
| title_sort | 2008 financial crisis and neoclassical economics |
| topic | financial crisis neoliberalism deregulation financialization political coalition |
| url | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572010000100001 |
| work_keys_str_mv | AT luizcarlosbresserpereira the2008financialcrisisandneoclassicaleconomics AT luizcarlosbresserpereira 2008financialcrisisandneoclassicaleconomics |