The Aftermath of the Global Crisis in Latin America: General Remarks and Future Perspectives

Abstract

The global economic crisis that began in 2007-2008 was one of thefour worst crises that capitalism has experienced. 1 A distinctive characteristic in this case is that the adverse impact in the first world was harsher than in the periphery, in contrast to crises in recent decades. In fact, the growth rate of GNP for the G7 was 3.7% in 2009, andfast-growing China suffered a deceleration, with growth rates droppingfrom 10% to 7.5% for two quarters. The debates about the nature of this crisis have been the most extensive and serious among heterodox economists since the neoclassical interpretation proved to be inadequate in explaining the core reasons behind the collapse. Among heterodox theories, post-Keynesian, Minskyan, and especially Marxist economists have elaborated different explanations regarding the current crisis. At the same time, the jury is still out as to whether or not this crisis has come to an end, or if, as many conclude, it is in an intermediate phase with an even more devastating crisis on the horizon. The majority of analyses recognize the problem of over-financialization of the global economy; in other words, the financial sector was out of control, and instead of providing important credit for productive activities, it was becoming a drain on the normal functioning and accumulation of the capitalist system, as presented in the argument of the growth of fictitious capital, reflected in the surge of speculation.Unfortunately, we still see mainstream financiers dominating politicsin the United States and Europe. In the case of the latter, thecontinued domination of monetarists defending austerity has keptEurope in the economic doldrums and has led to serious politicalconfrontations within the European Union. Consider the negativeimpacts such policies have had on Greece and Spain and the subsequentpolitical fallout. Nevertheless, monetarists and neoliberals stillrule the day, even though the writing on the wall says that those daysare numbered.