Financial crises serve capital by enabling restructuring and reclaiming working-class gains
Evidence
But we should not deceive ourselves; the inevitable (cyclical) financial crisis is no accident. It has happened time and again, with much the same outcome: it allows a partial restructuring of capitalist social relations. It has the potential to recalibrate the contradictions accumulated since the previous crisis and allows capital to, for instance, demand massive changes to state economic policy and both break up large integrated firms and allow smaller firms to be gobbled up by larger ones (Harvey 2006, 324–329). And, as we have seen in the current crisis, it allows capital to reclaim wealth fought for and won by the working class: the foreclosure of homes, the pulverization of the welfare state, the attack on wages, the assault on workers’ rights (Lapavitsas 2013; McNally 2011). This sort of “corrective” restructuring has been the aftermath of financial crises time and again (see, for instance, Polanyi 2001). Because capitalism is fundamentally based on contradictions, financial crises, in a way, regulate the inherent systemic crisis by limiting its effects to the particular sphere of finance. In the aftermath of such crises, capital has the opportunity redraw or renegotiate the lines of regulation. — Max Haiven, Cultures of Financialization, 498
Categorization
- XREF: Classic Marxist/Polanyian crisis theory — connects to Harvey’s limits to capital and to the broader financialization literature this reader is building toward. — connects to: 1970s crises moved business elites to prioritize capital liquidity over employment stability — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 39; Fiscal and monetary austerity jointly transfer capital accumulation costs onto working classes — Clara E. Mattei, The Capital Order: How Economists…, 774; Financial practice expresses class and acts as a control mechanism — Natascha van der Zwan, Making Sense of Financialization, 20 (+5 more)
- SEED: Angle: crises-as-regulatory-renegotiation offers a concrete mechanism piece on how ‘bailouts’ and austerity re-draw the rules of accumulation; could extend beyond finance to deWaard-style cultural readings.
Broader Connections
- Austerity is state intervention that transfers resources from workers to capital
#corroborates(0.88) — Clara E. Mattei, Escape from Capitalism, 195 - Fiscal and monetary austerity jointly transfer capital accumulation costs onto working classes
#corroborates(0.85) — Clara E. Mattei, The Capital Order, 774 - Finance escaping crisis consequences legitimated the economics profession dodging blame
#corroborates(0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 583 - Financial practice expresses class and acts as a control mechanism
#expands(0.72) — Natascha van der Zwan, Making Sense of Financialization, 20 - Financial deepening is linked to bankruptcies, bank failures, and recession.
#qualifies(0.72) — Shoshana Zuboff, The Age of Surveillance Capitalism, 1760