Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top

2018 | Book

Introduction: The Coming Crisis, the Gathering Storm Read chapter Read first chapter

The Coming Crisis

Editors: Prof. Colin Hay, Tom Hunt

Publisher: Springer International Publishing

Book Series : Building a Sustainable Political Economy: SPERI Research & Policy

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

Login to get access
insite
SEARCH

About this book

This book provides a timely warning of the dangers still present and building in the global economic system, whose frailty was exposed by the global financial crisis, and the Eurozone crisis it spawned. The contributors to this volume draw on SPERI’s work on the political economy of growth, stagnation, austerity and crisis, and placing each in the context of the wider environmental crisis.

Table of Contents

Frontmatter
Introduction: The Coming Crisis, the Gathering Storm
Abstract
The introductory essay reflects on the sources of disequilibrium and instability in the current context, and makes the case for a form of prospective precautionary thinking as a means of anticipating and protecting ourselves against the coming crisis. It does this through an assessment of the difference between the natural pessimism of the political economist and the natural optimism of mainstream economists. The chapter concludes by developing a short overview of the principal sources of risk and pathology in the UK, European and world economies today, relating these to the argument of the chapters to follow and how they each explore themes of disequilibrium and crisis in our present conjuncture and their potential role in the coming crisis.
Colin Hay, Tom Hunt
We are Not in Kansas Anymore: Economic and Political Shocks
Abstract
2016 was a year of apparent political shocks from Britain’s vote to leave the European Union to the election of Donald Trump. Yet whilst most analysis failed to predict these events, they were the clear product of the breakdown of the economic and political world that was in place before 2008. The breakdown of that order has produced two differing sets of consequences in relation to  economic and political probability. It has, in conjunction with high-frequency trading, transformed the monetary and financial world making the financial markets the site of black swan events in terms of existing models of financial markets, leaving us in an unknown economic world. By contrast, in politics, there are historical antecedents in past crises to the kind of events that unfolded in 2016.
Helen Thompson
On ‘the Other Crisis’: Diagnosing the Socio-Ecological Crisis
Abstract
A ‘socio-ecological’ crisis is unfolding between our societies and the ecologies of which they are a part. Exploring some of its key dimensions reveals that its precise nature is not as clear as is sometimes assumed. A little acknowledged, but extremely significant, debate over the ‘diagnosis’ of the crisis exists, which in turn reflects a long-running dispute between ‘under-consumptionist’ and ‘over-accumulationist’ currents in crisis theory. The debate points us to the very different and incompatible ‘prescriptions’ that the two currents offer for how to avoid the worst impacts of the crisis. Diagnosing the socio-ecological crisis is therefore central to understanding ‘the coming crisis’.
Martin Craig
Stagflation and the Shackles of Market Discipline
Abstract
Western capitalism has seen a return to stagflation since the global financial crisis. Through analysis of the causes and consequences of the stagflationary crisis, and by assessing the theory of secular stagnation, it is clear that major changes in economic policy are required to restore sustainable growth and rebuild a legitimate basis for democratic capitalism. Technical proposals to enhance demand through monetary policy innovation exist, yet arguably the real obstacles to breaking the stagflationary impasse are political and ideological, rather than simply technical. The pre-eminence of market discipline, as the organising principle of political economy over recent decades, must be surpassed. By drawing links between the stagnation of Western capitalism and the rise of populism, the chapter argues that the current political crisis of liberal democratic capitalism can only be averted by harnessing democratic mobilisation to create a new paradigm of economic governance.
Jeremy Green
Can Global Governance Prevent the Coming Crisis?
Abstract
Serious problems undermine the current regime of global governance and create a significant ‘global governance deficit’. They have not been solved by the G20, the self-styled steering committee of global economic governance, even though the latest G20 summit in 2016, held for the first time in China, did promote a new ‘Hangzhou Consensus’ that constituted at the very least a marker on behalf of the cause of more inclusive growth. Actually existing global governance is simply not strong enough to avert a further global economic crisis by its means. It is also now caught between conflicting ‘reglobalisation’ and ‘deglobalisation’ political pressures.
Anthony Payne
The Coming and Current Crisis of Indecent Work
Abstract
Key trends in the global labour market since the 2008 global financial crisis highlight a current and coming crisis of indecent work. Around the world insecure and precarious work is increasing, wages are stagnant and declining, and severe exploitation within global supply chains including forced labour, human trafficking, and modern slavery is growing in prevalence. Furthermore, the mechanisms to protect workers are weak and are increasingly being shaped by private actors in the global economy, and not by states. These are all signs of an escalating global labour and employment crisis. To prevent another economic crisis, the spread and normalisation of indecent work must be addressed.
Genevieve LeBaron
The Coming Crisis of Planetary Instability
Abstract
The earth is spinning into an ever-greater ecological crisis. Yet the primary solutions to end this crisis – ranging from international environmental agreements to national laws to corporate codes of conduct to individual lifestyle changes – are failing to make significant headway in ending this escalating crisis. The failure to confront rising rates of overconsumption, unequal consumption, and inequality of wealth are critical reasons for this crisis. Mainstream solutions such as the 2015 Paris Agreement on climate change and the 2016 Carbon Offsetting and Reduction Scheme for International Aviation are doing more to enrich and protect those in power than address the innate unsustainability of global wealth creation and consumption.
Peter Dauvergne
The European Migrant Crisis and the Future of the European Project
Abstract
The relentless news stories of recent years about the devastating numbers of lives lost in the Mediterranean, the living conditions endured by migrants seeking passage into and across Europe, and the incoherent political responses of European leaders, lead us to conclude that the European migrant crisis has been a case study in European political failure. The continued absence of effective responses to what are, clearly, inordinately complex problems reflects many of the wider political challenges facing elites and societies in Europe. But the ‘migrant crisis’ and its consequences are also a dimension of the ‘coming crisis’. Its political, economic and social implications are deeply troubling on their own, but all the more so when viewed alongside the long-standing economic crisis in southern Europe, and the political pressures for disintegration that surround an increasingly imperilled European project.
Nicola Phillips
The Paradox of Monetary Credibility
Abstract
One of the hallmarks of recent political events has been a growing suspicion of so-called elites and experts—chief among them, those very central bankers who were only recently being celebrated for saving the global economy. Central bank independence and rule-based monetary policy became the norm over recent decades on the assumption that democratic influence would erode the policies’ credibility and therefore effectiveness. Yet, recent electoral events remind us that insulating economic decision-makers too much from popular concerns tends to erode their legitimacy—and thus undermines the credibility they seek to protect. Whereas central banks provided some of the most effective responses to the last crisis, it is unlikely they will have the legitimacy and effectiveness needed to fight the next crisis. In fact, their declining legitimacy may be one of its major causes.
Jacqueline Best
Enduring Imbalances in the Eurozone
Abstract
The eurozone continues to be afflicted by a number of profound imbalances. Enduring weaknesses within the eurozone’s southern ‘periphery’, the euro’s deflationary bias and entrenched patterns of uneven development together threaten to undermine the eurozone as an economic and political unit. Technical ‘fixes’ exist to the eurozone’s imbalances. For example, enhanced fiscal transfer between member states could alleviate some of the dysfunctionalities of the single currency in its current form. But intractable political obstacles render these solutions untenable. As a result, eurozone states remain entrapped in a dysfunctional and unstable currency arrangement. When the ‘coming crisis’ does emerge, the imbalanced eurozone is likely to be front and centre of the global maelstrom.
Scott Lavery
Systemic Stabilisation and a New Social Contract
Abstract
We live in an era characterised by a complex and dynamic relationship between financial innovation, the state and patterns of investment. At its core is the little understood issue of shadow money—a ‘promise to pay’ backed by high-grade collateral, usually government bonds, which means that government debt now plays a key role in the stabilisation of the financial system. Central banks’ growing appreciation of how shadow money can generate destabilising dynamics has necessitated them to take preventative actions, and new forms of central bank-led systemic stabilisation have materialised. This new and complex dynamic requires a new social contract, the investment state—a compact between the state and financial markets and between the stabilisation and investments arms of the state.
Andrew Baker, Richard Murphy
Secular Stagnation: The New Normal for the UK?
Abstract
A range of authorities has argued recently that rather than the 2007–08 global financial crisis representing a major, but one-off, downturn, mature economies have now entered a period of ‘secular stagnation’ where underlying productivity growth rates have fallen to very low rates. Growth has only been sustained by various bubbles and is now likely to slump to low rates for the foreseeable future. Debates have largely focused on the US but the concept of secular stagnation in the context of UK requires examination. Before the crisis the UK economy saw particularly strong property price booms and credit expansion, with demand sustained by what has been termed ‘privatized Keynesianism’; the post-crisis UK economy is now experiencing prolonged stagnation in productivity and growth again appears to be driven by debt-financed private consumption.
Jonathan Perraton
China Crisis?
Abstract
Since the onset of China’s massive industrial expansion in the 1980s, predictions of a coming crisis have consistently been proven wrong as its growth trajectory has continued, decade after decade, seemingly unabated. But are things different this time? To answer this question, the contemporary moment must be set within the wider context of China’s substantial developmental transformation. A range of challenges lend weight to the notion of an impending crisis, but there is significant uncertainty about the likely extent of adjustment that will be required. How Chinese policymakers grapple with these imperatives, and the way that their costs and consequences are distributed, will ultimately shape the next stage of China’s spectacular development process.
Matthew Bishop
Conclusion: The Crisis Gets Political
Abstract
The financial crisis of 2008 set in train a course of profound shocks that have shaped this post-crisis decade. The crisis has had three phases up to now, and three different epicentres, and is now entering into a fourth phase. In the three previous phases, the crisis was managed and contained but not resolved. In 2016, many observers and agencies warned that the crisis was far from over and that even greater shocks might lie ahead. The vote for Brexit in the UK and the election of Donald Trump in the US mark the opening of a fourth phase of the crisis, which is directly political in challenging the assumptions of neoliberalism and globalisation on which the recent governance of the international market order have been based.
Andrew Gamble
Backmatter
Metadata
Title
The Coming Crisis
Editors
Prof. Colin Hay
Tom Hunt
Copyright Year
2018
Electronic ISBN
978-3-319-63814-0
Print ISBN
978-3-319-63813-3
DOI
https://doi.org/10.1007/978-3-319-63814-0