Financial Crisis - Compreending the past, Raising the future
Ferreira, João Pedro
Economics Univesity of Coimbra, Faculty of Economics Coimbra, Portugal
Periods of crisis tend to correspond to moments of transformation and modification of the paradigms that ruled the society and were the cause of the instability. As such, the actual crisis is fully correlated with the neo-liberal ideal and its international implementation after the "Washington Consensus". The policies adopted by several governments led to the deregulation of markets, privatization of several services and the erosion of the welfare state.
The goal of this paper is to reflect on the consequences of the adopted path together with the deterioration of the capital-labour compromise and the financialisation of markets. However, it is impossible to find in the neo-liberal doctrine the real answers and solutions to the serious economical and social problems generated.
The sub-prime crisis and how it spread in the international markets was not an inevitability but yet a consequence of the global economic integration and the levels of indebtedness of economies.
The political speech has insisted in the modifications of laws with the objective of implementing a truly regulatory system that would be capable of preventing new crisis and instabilities. However, as many times in history, the political speech is by no means related to the political practice. Europe, as a regional bloc with global relevance, and the European Governments need to find concerted solutions for the crisis that dare to break with the neo-liberal agenda and to cease the injection of capital in the financial markets. The key has to go through the implementation of a heterodox perspective of Political Economy. In this sense, there should be an attempt to recover the analysis and subjects studied by different authors that considered the existence of systemic and systematic crisis in capitalism.
Going back to authors as Keynes, Minsk and Marx shall implicate new reflections, without prejudice, about actions and measures that must be taken to prevent the deterioration of social and economic conditions of most citizens who are, presently, dealing with threats that do not seem to worry neo-liberal theorists.