The Globalization and Development Reader: Perspectives on Development and Global Change, 2nd Edition

20 The Crises of Capitalism (2010)

David Harvey

David Harvey: Okay so we’ve been through this crisis and there are all sorts of explanatory formats out there. And it’s interesting to look at the different genres. One genre is that it’s all about human frailty. Alan Greenspan took refuge in the fact “It’s human nature” he said, “and you can’t do anything about that.” But there’s a whole world of explanations that kind of say it’s the predatory instincts, it’s the instincts, the mastery, it’s the delusions of investors, and the greed and all the rest of it. So there’s a whole range of discussion of that. And, of course, the more we learn about the daily practices on Wall Street we kind of forget there’s a great deal of truth in all of that.

The second genre is that there’s institutional failures; regulators were asleep at the switch; the shadow banking system innovated outside of their purview etc, etc, etc and, therefore, institutions have to be reconfigured and it has to be a global effort by the G20 something of that kind. So we look at the institutional level and say that has failed and that has to be reconfigured.

The third genre is to say everybody was obsessed with a false theory, they read too much Hayek and believed in the efficiency of markets and it’s time we actually got back to something like Keynes or we took seriously Hyman Minsky’s theory about the inherent instability of financial activities.

The next genre is it has cultural origins. Now we don’t hear ...