The Credit Crunch: Neo-Liberalism, Financialisation and the Gekkoisation of Society

This paper offers a broad overview and analysis of some of the main causes and consequences of the current economic crisis. While attempting to flag up some of the key continuities between the conditions contributing to the current crisis and those that produced the 'great crash' of 1929, it is argued that the 'credit crunch' must be understood in broad historical context. Specifically, it is suggested that the turn to neo-liberal economics in the late 1970's, principally in the UK and US, restored many of the structures and socio-economic characteristics that were prevalent in the 1920's, inevitably producing a highly similar outcome. Overall, it is argued that the (re)financialisation of the economy, the deregulation of markets, together with the cultivation of a culture of rampant individualism and acquisition, pervading the markets and wider society, have coalesced to sow the seeds of reckless profit seeking that have led to the current crisis. Moreover, given that latter, it is suggested that the current upheaval is as much a reflection of social and cultural decay as it is a failure of economic governance. Keywords: 'Credit Crunch', Neo-Liberalism, Financialisation, Housing Bubble, the 'Great Crash', 'Gekkoisation' Introduction …Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True, they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored conditions. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish. The money changers have fled their high seats in the temple of our...