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Publication Date

2010

Abstract

Banking and finance play a critical role in the economy by channeling savings towards productive investments. By the early twentieth century the lessons were learned that, left to its own devices, finance capital tends towards unbridled speculation and ends up playing havoc with the economy. The collective response was a Keynesian compromise whereby finance capital was regulated both nationally and internationally to put a check on speculation and to channel it to support the productive economy. The result was an extended period of economic growth and stability. Over the last thirty years, the neoliberal counter revolution reversed these regimes and facilitated hegemony of finance capital. The result has been instability and a widening of the gap between the rich and the poor. The 2008-09 financial meltdown and the resulting Great Recession have furnished an opportunity to change course and to contain the power and machinations of finance capital. Over 200 years ago, Thomas Jefferson cautioned, “banking institutions are more dangerous than standing armies. Today, in “the age of leverage and derivatives, finance capital equipped with “financial weapons of mass destruction can and do inflict more destruction than an eighteenth century standing army ever could. To guard against such destruction the working classes must insist upon transparency and accountability of the finance capital. In order to protect democracy and the future of the society, the oligarchy of finance capital must end.

First Page

109

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Symposium: International Finance after the Crash: Regional Responses to the Global Financial Crisis

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