Business as Usual

Business as Usual: The Roots of the Global Financial Meltdown

Craig Calboun
Georgi Derluguian
Copyright Date: 2011
Published by: NYU Press
Pages: 312
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  • Book Info
    Business as Usual
    Book Description:

    Situates the current crisis in the historical trajectory of the capitalist world-system, showing how the crisis was made possible not only by neoliberal financial reforms but by a massive turn away from manufacturing things of value towards seeking profit from financial exchange and credit. Much more basic than the result of a few financial traders cheating the system, this is a potential historical turning point. In original essays, the contributors establish why the system was ripe for crisis of the past, and yet why this meltdown was different. The volume concludes by asking whether as deep as the crisis is, it may contain seeds of a new global economy, what role the US will play, and whether China or other countries will rise to global leadership. Contributors include: Giovanni Arrighi, Gopal Balakrishnan, Manuel Castells, Daniel Chirot, Fernando Coronil, Nancy Fraser, James K. Galbraith, David Harvey, Caglar Keyder, Beverly J. Silver, and Immanuel Wallerstein. The three volumes can purchased individually or as a set.

    eISBN: 978-0-8147-2355-5
    Subjects: Sociology

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-6)
  3. Series Acknowledgments
    (pp. 7-8)
  4. SERIES INTRODUCTION: From the Current Crisis to Possible Futures
    (pp. 9-42)
    Craig Calhoun

    The phrase “global financial crisis” has been repeated ten million times since March 2008. The rich countries of the twentieth century have been plunged into the worst recession since the Great Depression. Even after massive infusions of taxpayers’ money, financial institutions remain shaky. Major banks have failed; sovereign states in Europe face bankruptcy with unpredictable consequences for the European Union. Recovery remains elusive, and perhaps “recovery” is not the right word, for this crisis may mark a dramatic moment in a more basic shift of economic momentum and political power from the rich countries of the twentieth century—especially in...

  5. Introduction
    (pp. 43-52)
    Craig Calhoun and Georgi Derluguian

    No adequate account of the contemporary crisis can be limited to short-term problems inside the finance industry. Overleveraged investment banks, the spread of proprietary trading, ever more opaque and poorly understood derivatives, and hedge funds operating beyond regulation all played significant roles. So did a culture of gambling and greed. But it is just as important to explain why the finance industry became so central to capitalism in this period and why risks became so large, concentrated in private hands, yet globally linked. The short-term failings of business as usual are also connected to larger-scale transformations.

    This is missed by...

  6. Chapter 1 The End of the Long Twentieth Century
    (pp. 53-68)
    Beverly J. Silver and Giovanni Arrighi

    Writing almost twenty years ago—shortly after the collapse of the Soviet Union—the British historian Eric Hobsbawm pointed to a widespread sense of confusion about where the world was headed: he wrote that it was as if we were “surrounded by a global fog.” The citizens of the world at the end of the twentieth century “knew for certain that an era of history had ended. They knew very little else.”¹ In the two decades since this was written, the shape of the “new era” has continued to take form, but the “global fog” has not dissipated.

    Understandings about...

  7. Chapter 2 Dynamics of (Unresolved) Global Crisis
    (pp. 69-88)
    Immanuel Wallerstein

    Since about 2007, politicians, pundits, and economists have all been talking about a global crisis, with considerable disagreement about the nature of this crisis and the measures that should be taken to resolve it. Memories are short, but actually, there was a quite similar discussion in the 1970s.

    In 1982, I published a book, jointly with Samir Amin, Giovanni Arrighi, and Andre Gunder Frank, entitledDynamics of Global Crisis.This was not its original title. We had proposed the titleCrisis, What Crisis?The US publisher did not like that title, but we used it in the French translation. The...

  8. Chapter 3 The Enigma of Capital and the Crisis This Time
    (pp. 89-112)
    David Harvey

    There are many explanations for the crisis of capital that began in 2007. But the one thing missing is an understanding of “systemic risks.” I was alerted to this when Her Majesty the Queen visited the London School of Economics and asked the prestigious economists there why they had not seen the crisis coming. She being a feudal monarch rather than an ordinary mortal, the economists felt impelled to answer. After six months of reflection, the economic gurus of the British Academy submitted their conclusions. The gist was that many intelligent and dedicated economists had worked assiduously and hard on...

  9. Chapter 4 A Turning Point or Business as Usual?
    (pp. 113-136)
    Daniel Chirot

    In the spring of 2009, as the crash of 2008–9 seemed to be dragging the US economy toward a new depression and the entire world was following, I talked to some knowledgeable bankers in the state of Washington about the fall of Washington Mutual (WaMu) in 2008, the largest bank failure in US history up to that time.¹ (Lehman’s collapse was bigger and more consequential, but that was because it was much more than a bank. Other likely candidates for collapse among banks bigger than WaMu, Bank of America and Citi, were saved by government intervention.) I asked them...

  10. Chapter 5 Marketization, Social Protection, Emancipation: Toward a Neo-Polanyian Conception of Capitalist Crisis
    (pp. 137-158)
    Nancy Fraser

    By all rights, the current crisis of neoliberal capitalism should alter the landscape of critical theorizing. During the past two decades, most theorists kept their distance from the sort of large-scale social theorizing associated with Marxism. Apparently accepting the necessity of academic specialization, they settled on one or another branch of disciplinary inquiry, conceived as a freestanding enterprise. Whether the focus was jurisprudence or moral philosophy, democratic theory or cultural criticism, the work proceeded in relative disconnection from fundamental questions of social theory. The critique of capitalist society, pivotal for earlier generations, all but vanished from the agenda of critical...

  11. Chapter 6 Crisis, Underconsumption, and Social Policy
    (pp. 159-184)
    Caglar Keyder

    This chapter seeks to analyze the reasons for the chronic problems experienced by the crisis-prone world economy and points to a possible future. As the greatest burden of globalization is borne by the poor, whose fortunes have worsened since the 1980s, any ethically desirable scenario for the future should seek to enhance their chances of securing a livelihood. In both the North and the South, there is a new poverty suffered by those segments of the population who are either not employed or employed at low wages, in precarious positions, and without security. Their incomes have stagnated, and premarket sources...

  12. Chapter 7 The Crisis of Global Capitalism: Toward a New Economic Culture?
    (pp. 185-210)
    Manuel Castells

    The hypothesis underlying the analysis presented in this chapter is that the crisis of global capitalism that exploded in 2008 is structural and multidimensional. Therefore, even if the free fall of the economy was contained by late 2009, thanks to massive government intervention around the world, it is not likely that we will see a return to the social and economic conditions that characterized the rise of deregulated, global informational capitalism in the preceding three decades. The policies and strategies that are currently in place to handle the crisis may result in a sharply different economic system, just as the...

  13. Chapter 8 The Convolution of Capitalism
    (pp. 211-230)
    Gopal Balakrishnan

    What does today’s slow-motion meltdown of markets indicate about the historical viability of capitalism? Looked at in a longer-term historical perspective, the latest round of global turbulence might open up new perspectives on its outer boundaries of development. Indeed, properly understood, it brings to light an epochal shift concealed over the preceding decades of financialization. In what follows, I argue that the world’s most advanced societies have been heading to what the classical economists once called “the stationary state” of civilization, a potentially insurmountable condition of stagnation. After a quarter century of ever-greater dependency on debt and speculation, both the...

  14. Chapter 9 The Future in Question: History and Utopia in Latin America (1989–2010)
    (pp. 231-264)
    Fernando Coronil

    The year 1989, world historical for many reasons, marked the close of a long period of military dictatorships in Latin America. It also initiated novel approaches to progress through democratic procedures and the reconceptualization of democracy as not only a means to achieve progress but also one of its central ends. At that time, the defeat of Augusto Pinochet in a plebiscite brought to an end a dictatorship that had imposed on Chile a harsh neoliberal “shock treatment” that inaugurated neoliberalism’s ascendancy in Latin America. Pinochet’s victorious opponent in 1989 was theConcertación, an electoral alliance of seventeen political parties,...

  15. Notes
    (pp. 265-292)
  16. About the Contributors
    (pp. 293-296)
  17. Index
    (pp. 297-312)