Sunday, 28 September 2008

Introduction

This blog aims to collect materials (especially online materials) on the contribution Marxian theory can make to understanding the causes of the financial crisis of 2008.

It is common ground that the immediate cause of the crisis is a vast bubble of increasingly risky lending that has blown up especially in the US in the last 10-15 years, and has now gone into a savage reverse triggered by the collapse in house prices and rising level of mortgage defaults. But the more fundamental questions are: What is it about the modern US economy that has given rise to this credit bubble? Are bubbles like this intrinsic to a capitalist economy as such or only to the 'deregulated' version of it in the US since the 1970s? Or does the development of capitalism drive in the direction of forms of it that are increasingly susceptible to such credit bubbles?

There are a plenty of left-wing websites that talk in generic terms about the 'anarchic nature of capitalism', the 'growth of financial parasitism', or the 'decay of American capitalism', but these phrases by themselves do not explain anything. Nor does referring to the 'tendency of the rate of profit to fall' unless it can be shown how this tendency gives rise to credit bubbles. Here we aim to collect material that tries seriously to link an explanation of the present credit bubble and its implosion to Marx's basic account of the capitalist economy.

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