Open main menu

Wikipedia β


Financial crisis of 2007–2008

1,299 bytes added, 2 months ago
Systemic crisis
[[John Bellamy Foster]], a political economy analyst and editor of the ''[[Monthly Review]]'', believes that the decrease in GDP growth rates since the early 1970s is due to increasing [[market saturation]].<ref>{{cite web|url=|title=The Financialization of Capital and the Crisis|publisher=Monthly Review|accessdate=November 11, 2009}}</ref>
The conventional Marxist explanation of capitalist crises was pointed to by economists [[Andrew Kliman]], Michael Roberts, and Guglielmo Carchedi, in contradistinction to the Monthly Review school represented by Foster. These Marxist economists do not point to low wages or underconsumption as the cause of the crisis, but instead point to capitalism's long-term tendency of the rate of profit to fall as the underlying cause of crises generally. From this point of view, the problem was the inability of capital to grow or accumulate at sufficient rates through productive investment alone. Low rates of profit in productive sectors led to speculative investment in riskier assets, where there was potential for greater return on investment. The speculative frenzy of the late 90s and 2000s was, in this view, a consequence of a rising organic composition of capital, expressed through the fall in the rate of profit. According to Michael Roberts, the fall in the rate of profit "eventually triggered the credit crunch of 2007 when credit could no longer support profits".<ref>{{cite web|last=Roberts|first=Michael|url=|title=Carchedi, Foster, and the causes of crisis|accessdate=December 13, 2017}}</ref>
In 2005, [[John C. Bogle]] wrote that a series of challenges face capitalism that have contributed to past financial crises and have not been sufficiently addressed:{{quotation|Corporate America went astray largely because the power of managers went virtually unchecked by our gatekeepers for far too long ... . They failed to 'keep an eye on these geniuses' to whom they had entrusted the responsibility of the management of America's great corporations.}} Echoing the central thesis of [[James Burnham]]'s 1941 seminal book, ''[[James Burnham#The Managerial Revolution|The Managerial Revolution]]'', Bogle cites particular issues, including:<ref>{{cite book|last=Bogle|first=John|year=2005|title=The Battle for the Soul of Capitalism|publisher=Yale University Press|isbn=978-0-300-11971-8}}</ref>