1. Capitalism is first and foremost a historical social
system.
Markets and the Financial Crash
2007-2014
Dr. Conor McCabe
UCD School of Social Justice
25 June 2014

4. [Lehman collapse, 15 September 2008 - headlines 16 Sep 2008]

16. Economics is a social subject.
It’s the interactions and relationships between people
that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.

17. Economics is a social subject.
It’s the interactions and relationships between people
that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.
A society in which ordinary people know more
about economics, and recognize the often conflicting
interests at stake in the economy, is a society in
which more people will feel confident deciding for
themselves what’s best – instead of trusting the
experts. It will be a more democratic society.

18. Economics is a social subject.
It’s the interactions and relationships between people
that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.
A society in which ordinary people know more
about economics, and recognize the often conflicting
interests at stake in the economy, is a society in
which more people will feel confident deciding for
themselves what’s best – instead of trusting the
experts. It will be a more democratic society.
Quite apart from whether you think capitalism is
good or bad, capitalism is something we must study.
It’s the economy we live in, the economy we know.

21. DREAM…

22. INNOVATION

23. Capitalism is first and foremost a historical social
system.
What distinguishes the historical social system we
are calling historical capitalism is that in this
historical system capital came to be used (invested)
in a very special way. It came to be used with the
primary objective or intent of self-expansion.

24. Capitalism is first and foremost a historical social
system.
What distinguishes the historical social system we
are calling historical capitalism is that in this
historical system capital came to be used (invested)
in a very special way. It came to be used with the
primary objective or intent of self-expansion.
It was this relentless and curiously self-regarding
goal of the holder of capital, the accumulation of
still more capital, and the relations this holder of
capital had therefore to establish with other persons
in order to achieve this goal, which we denominate
as capitalism.

31. “Capitalism only triumphs when it becomes
identified with the state, when it is the state.
In its first great phase, that of the Italian city-states
of Venice, Genoa and Florence, power lay in the
hands of the moneyed elite. In seventeenth-century
Holland the aristocracy of the Regents governed for
the benefit and even according to the directives of
the businessmen, merchants, and money-lenders.
Likewise, in England the Glorious Revolution of
1688 marked the accession of business similar to
that in Holland.” (Braudel 1977)
The fusion of state and capital was the vital
ingredient in the emergence of a distinctly capitalist
layer on top of, and in antithesis to, the layer of
market economy.

32. Over the last quarter of a century something
fundamental seems to have changed in the way in
which capitalism works.
The tendency since 1970 has been towards greater
geographical mobility of capital.

35. Rather than being a modest helper to the capital
accumulation process, [finance] gradually turned
into a driving force. Speculative finance became a
kind of secondary engine for growth given the
weakness in the primary engine, productive
investment.

36. Rather than being a modest helper to the capital
accumulation process, [finance] gradually turned
into a driving force. Speculative finance became a
kind of secondary engine for growth given the
weakness in the primary engine, productive
investment.
The result was an acceleration of the process of debt
build-up – going beyond mere speculative orgies
that historically came at the peak of business cycles,
becoming instead a permanent, institutionalized
feature of the economy.

37. Rather than being a modest helper to the capital
accumulation process, [finance] gradually turned
into a driving force. Speculative finance became a
kind of secondary engine for growth given the
weakness in the primary engine, productive
investment.
The result was an acceleration of the process of debt
build-up – going beyond mere speculative orgies
that historically came at the peak of business cycles,
becoming instead a permanent, institutionalized
feature of the economy.
The search by capital for profitable outlets for its
surplus despite the stagnation of investment
opportunities within production, coupled with the
belief that asset prices as a whole went only one way
– up – generated a secular financial explosion. (p.18)

39. Financialization refers to the increasing
importance of financial markets,
financial motives, financial institutions
and financial elites in the operation of
the economy and its governing
institutions, both at the national and
international levels.
Gerald Epstein (2002) Financialization, Rentier Interests,
and Central Bank Policy’

40. “In the case of the United States,
financialization during the 1990s led to a closer
alignment of large industrial and financial firms
in the U.S., leading to a greater emphasis by
Alan Greenspan and the U.S. Federal Reserve
in financial asset appreciation as a goal of
monetary policy.”
Gerald Epstein (2002) ‘Financialization, Rentier
Interests, and Central Bank Policy ‘

41. 1970s – The Monetarist revolution
1980s – war on labour
1990s – Credit as a substitute for wage increases
2000s – Credit solution for wage stagnation fails
Present day – open conflict over monetary policy
once again

56. “Part of the reason people get less giddy
about the Dow than they did five years
ago is that they have learnt a bit about
inequality.
what looks like a recovery, a rally or an
increase in consumer confidence may
just be the effect of elites passing money
among themselves.“
Christopher Caldwell, FT 9 March 2013