Tom Griffin (London, OK): An openDemocracy piece from Mary Kaldor puts the credit crisis into a longer term perspective, highlighting the work of Carlota Perez on long waves of economic change:
Perez's contribution is two fold. First she demonstrates the importance of the institutional framework. She explains crises and depressions in terms of a mismatch between social and political institutions and the techno-economic paradigm. She accounts for `golden ages' in terms of contrasting periods of harmony.
The depression of the 1930s is explained in terms of the mismatch between financial and regulatory arrangements, which were an expression of the social and political institutions, largely established by Britain in the late nineteenth century and the huge potential for economic expansion resulting from the marriage of oil and mass production pioneered in the United States known as Fordism.
Over at oD Today, Tony Curzon Price picks up on some of the political implications of the theory:
One of the nice things about this way of looking at the crisis and at economic history is that it contextualises economic ideologies and offers a creative synthesis that might take us beyond state/market arguments. It encompasses each in different phases of the epochs of development.It also allows us to look at the 1930s asking not so much about the lessons in terms of technicalities of money supply management, but more in terms of the political and institutional shifts that took the world economy beyond 1930.
This perspective perhaps points to some telling but troubling conclusions about the political reaction to the crisis in the UK.
In the current environment, left-wing solutions that had seemed discredited a few years, months, weeks or even days ago, are being revived, not because of any new ideas or arguments from the left, but because of the need to adjust to dramatically changed circumstances. Alistair Darling's conversion to Keynesian demand management is a prime example.
One reason for the Conservatives' confused response to the credit crisis, was their belief that the neo-liberal hegemony that emerged in the late 1970s and 1980s was a fundamental vindication of their position, rather than a generational shift. In this, the neo-liberals fell victim to the same illusion as the makers of the post-war Keynesian consensus which they replaced.
At the moment, one has a depressing sense that many on the left are only too happy to take their place in this cycle, and make the most of the new opportunity to dust off old manifestos.
That is not good enough. As Kaldor makes clear, the current long wave will not simply be a replay of the last one. It presents new opportunities and new challenges, which require fundamentally new solutions.
One such issue which Kaldor identifies is that of environmental sustainability. Calls for a 'Green New Deal', like the one made by Brian Davey below, accurately capture the combination of familiarity and novelty in the present situation.
The challenges of the new long wave may yet prove as demanding as any of those of the past. Indeed some thinkers (such as Immanuel Wallerstein, whose theory has many points in common with Perez's) wonder whether the current wave may yet be the last one.
