"So in the book I chart the emergence of this model from the 1980s
onwards. And basically the argument of the book is that all forms of
capitalism tend towards crisis, right? In the 1970s we had a crisis of
capitalism in the U.S. and in the U.K. There was this decade of
stagnation, political turmoil. You had the breakdown of the Bretton
Woods system in 1971 which facilitated in many ways the boom in finance
that you had later in the 80s.
It was out of that crisis that a bunch of new politicians – Reagan here,
Thatcher in the U.K. – came up with this new model that was basically
neoliberalism. Neoliberalism as an ideology gives rise to this
historical economic model which I call finance-led growth. And they
argue for a massive deregulation of the banking system, for
privatization, for cracking down on the union movement, for a bunch of
stuff that facilitates the growth of the big banks and facilitates the
growth of individual investment out of big institutional investors. And
this allows those actors to have much more of an influence over all
different parts of the economy.
So you get a boom on Wall Street. You get an increase in lending. You
get the growth of these big international banks. And you get a state
that becomes much more thoughtful about what’s going on on Wall Street
than perhaps what’s going on on Main Street.
That’s a process that really begins in the 1980s and accelerates through
the 90s and early 2000s until you get to the financial crisis. And the
argument in the book is that that wasn’t just a banking crisis, it was
the collapse of an entire economic model. So now we’re living in a
similar crisis moment as the one we had in the 70s where the old models
creaking. But we haven’t quite figured out what we want to come next yet."
Via Quinquagenarian Cathugger.
*** Xanni ***
Chief Scientist, Xanadu
Partner, Glass Wings
Manager, Serious Cybernetics