The global economic crisis is not merely financial, a moment in the historical cycle of credit and debt. The removal of political controls over money in recent decades has led to a situation where politics is still mainly national, but the money circuit is global and lawless. Events since 2008 should be seen as the collapse of “national capitalism”, the money system that the world lived by in the twentieth century. This has been unravelling since the US dollar went off gold in 1971 and money derivatives were invented the following year. The idea of central bank money or legal tender is tenacious despite this development. As the need for international cooperation intensifies, the disconnect between economy and political institutions undermines effective solutions. The crisis of the eurozone in 2011-2012 may be understood best as a Sophoclean tragedy in which good intentions cannot remedy the consequences of past mistakes.
2011/12 is the political consequence of the financial crisis of 2007/8. There is still a tendency to see the crisis in economic rather than political terms. In this respect, neoliberalism’s detractors often reproduce the free market ideology they claim to oppose. The euro is by no means the only symptom of this crisis, but it may well be seen in retrospect as the decisive nail in the coffin of the world economy today. One way of approaching our moment in history is to ask not what is beginning, but what is ending. This is not straightforward.
As a partial antidote to the daily news, I find it useful to attempt a historical periodization of the last two centuries or more, mainly to indicate that the present rupture in history opens up the prospect of several decades of turbulence.
1776-1815 An age of war and revolutions
1815-1848 The industrial revolution
1848-1873 Origins of national capitalism
1873-1914 First age of financial globalization
1914-1945 The second thirty years war
1945-1979 Les trente glorieuses of social democracy
1979-2008 Second age of financial globalization
2008- Another age of war and revolutions?
My aim is not to predict the inevitably dire outcome of the present global crisis, but to invite public debate at a more serious level that may help us to avoid such an outcome. Continue reading ‘The collapse of national capitalism: a Sophoclean tragedy’ »