Is it Greek or Deja Vu All Over Again?: Neoliberalism, and Winners and Losers of International Debt Crises
Seattle University School of Law - Center for Global Justice
Loyola University Chicago Law Journal, Vol. 42
Seattle University School of Law Research Paper No. 10-33
The global financial meltdown and the Great Recession of 2007-09 have brought into sharp relief the uneven distribution of gain and pain in economic crises. The 2009-10 debt crisis of Greece has resulted in a windfall for financial institutions at the expense of tax-payers, a rollback of welfare systems, and impoverishment of the working classes. This result is in tune with a pattern evidenced by the ubiquitous international debt crises of the last three decades, including the Latin American crisis of the 1980s, and the Asian crisis of 1990s. The recurrent international debt crises of the last three decades and the resulting transfers of wealth from the poor to the rich are the products of the neoliberal restructuring of economies that aims to rollback the gains made by the working classes under the Keynesian welfare compromise, and to establish the hegemony of finance capital. These objectives have been facilitated by an extensive refashioning of the U.S. and international regulatory regimes resulting in financialization of the global economy and unbridled international mobility of finance capital. Global financial institutions channeled access global liquidity in ways that created unsustainable international debts, followed by recurrent international debt crises. These crises are managed to displace welfare systems with neoliberal restructuring. The end result is transfer of wealth from the poor to the rich, further impoverishment of working classes, and enhanced power of finance capital. A collective moratorium on debt servicing by the Global South is a viable path towards a new global financial order that is sustainable and gives human beings priority over capital.
Number of Pages in PDF File: 91
Keywords: Neoliberalism, financialization, Greece, debt crisis, Argentina, Mexico, Bretton Woods, IMF, Federal Reserve, European Union, Wall Street, finance capital, capitalism, globalization, sovereign default, Keynes, Great Recession, financial meltdown, inflation, imperialism, Volcker shock, bond market
Date posted: December 1, 2010