Financial crashes correct overextended finance relative to depressed industrial production

Evidence

Black Monday, like its predecessor, Black Thursday, 24 October 1929, represented the forcible correction of a situation in which the financial sector had been allowed to overextend itself by comparison with the relatively depressed industrial base of Western capitalism. But state intervention, although it prevented a repetition of the move from financial crash to world slump in 1929-31, could not abolish the contradictions which had given rise to the crash in the first place. — Alex Callinicos, Against Postmodernism, 530

Categorization

• XREF: Connects to Marxist crisis theory and the classic ‘financial speculation vs. productive base’ distinction, echoing Jameson’s late-capitalism periodization and David Harvey’s work on financialization. — connects to: Finance and industry form interdependent but distinct fractions of capital; The 2008 crash was rooted in decades of industrial decline papered over by debt — Andrew deWaard, Derivative Media: How Wall Street…, 79; Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis — Albert Bandura, Moral Disengagement: How People Do Harm…, 1492 (+5 more)

Broader Connections

• The 2008 crash was rooted in decades of industrial decline papered over by debt #expands (0.80) — Andrew deWaard, Derivative Media, 79
• Finance and industry form interdependent but distinct fractions of capital #expands (0.75)
• The shift to finance capitalism is nonlinear, not a clean rupture #qualifies (0.75)
• Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis #corroborates (0.70) — Albert Bandura, Moral Disengagement, 1492