Business as Usual: The Roots of the Global Financial Meltdown

313 Pages·2011·2.3 MB·English

by  Craig J. Calhoun

Business as Usual
POSSIBLE FUTURES SERIES
Series Editor: Craig Calhoun
In 2008, the World Public Forum convened a group of researchers and statesmen in Vienna
to take stock of major global challenges. The magnitude of the global financial crisis was
only just becoming clear, but the neoliberalism and market fundamentalism of the post-
Cold War years had already taken a toll of their own.
Austrian Prime Minister Alfred Gusenbauer opened the meeting with a call to make
sure the urgent attention the financial crisis demanded was not just short-term and super-
ficial but included consideration of deeper geopolitical issues and governance challenges
facing the global community.
In this spirit, several of the researchers present envisioned a project to bring together
the analyses of leading scholars from a range of different countries, assessing not only the
financial crisis but shifts in relations among major powers, trends in political economy, and
the possible futures these opened. The group sought insight into emerging issues; it did not
indulge the fantasy that the future could be predicted in detail.
The World Public Forum, created to facilitate a dialogue of civilizations rather than
a clash, saw value in bringing high quality research to bear on public issues and possible
futures. It provided financial support to the project including opportunities for many of the
researchers to gather at its annual meetings on the island of Rhodes. This initial support
was crucial to inaugurating the present important series of books.
VOLUME I
Business as Usual: The Roots of the Global Financial Meltdown
Edited by Craig Calhoun and Georgi Derluguian
VOLUME II
The Deepening Crisis: Governance Challenges after Neoliberalism
Edited by Craig Calhoun and Georgi Derluguian
VOLUME III
Aftermath: A New Global Economic Order?
Edited by Craig Calhoun and Georgi Derluguian
ALSO IN THE POSSIBLE FUTURES SERIES
Russia: The Challenges of Transformation
Edited by Piotr Dutkiewicz and Dmitri Trenin
Business as Usual
The Roots of the Global Financial Meltdown
Edited by Craig Calhoun and Georgi Derluguian
A joint publication of the Social Science Research Council
and New York University Press
NEW YORK UNIVERSITY PRESS
New York and London
www.nyupress.org
© 2011 by Social Science Research Council
All rights reserved
Text Design: Debra Yoo
Library of Congress Cataloging-in-Publication Data
Business as usual : the roots of the global financial meltdown / edited by Craig
Calhoun and Georgi Derluguian.
p. cm. -- (Possible futures series ; v. 1)
“A co-publication with the Social Science Research Council.”
Includes bibliographical references and index.
ISBN 978-0-8147-7277-5 (cl : alk. paper) -- ISBN 978-0-8147-7278-2 (pb
: alk. paper) -- ISBN 978-0-8147-7279-9 (e-book : alk. paper) 1. Financial
crises. 2. Capitalism. 3. Global Financial Crisis, 2008-2009. 4. Consumption
(Economics) I. Calhoun, Craig J., 1952- II. Derluguian, Georgi M.

HB3722.B867 2011
330.9’0511--dc22 2010052308
New York University Press books are printed on acid-free paper,
and their binding materials are chosen for strength and durability.
Printed in the United States of America
c 10 9 8 7 6 5 4 3 2 1
p 10 9 8 7 6 5 4 3 2 1
References to Internet websites (URLs) were accurate at the time of writing.
Neither the author nor New York University Press is responsible for URLs that
may have expired or changed since the manuscript was prepared.
Contents
Series Acknowledgments 7
Series Introduction: From the Current Crisis to
Possible Futures 9
Craig Calhoun
Introduction 43
Craig Calhoun and Georgi Derluguian
1 The End of the Long Twentieth Century 53
Beverly J. Silver and Giovanni Arrighi
2 Dynamics of (Unresolved) Global Crisis 69
Immanuel Wallerstein
3 The Enigma of Capital and the Crisis This Time 89
David Harvey
4 A Turning Point or Business as Usual? 113
Daniel Chirot
5 Marketization, Social Protection, Emancipation:
Toward a Neo-Polanyian Conception of Capitalist
Crisis 137
Nancy Fraser
6 Crisis, Underconsumption, and Social Policy 159
Caglar Keyder
7 The Crisis of Global Capitalism:
Toward a New Economic Culture? 185
Manuel Castells
8 The Convolution of Capitalism 211
Gopal Balakrishnan
9 The Future in Question: History and Utopia in
Latin America (1989–2010) 231
Fernando Coronil
Notes 265
About the Contributors 293
Index 297
Series Acknowledgments
The volumes in this series have their roots in discussions at the World
Public Forum, Dialogue of Civilizations. At a 2008 meeting in Vienna,
the WPF honored former Austrian chancellor Alfred Gusenbauer for
his leadership in global affairs and assembled a “high-level summit of
experts” to join him and WPF president Vladimir Yakunin in discussion
of the financial crisis then unfolding and its implications. Several con-
tributors to these volumes were among the participants in that discussion,
and the larger Possible Futures project was initiated. We are grateful to
the WPF and especially to President Yakunin for this initial launch, for
subsequent intellectual discussions, and for leadership in assembling a
range of international scholars to address key public issues. Dr. Yakunin
has himself written with distinction on these matters; without his initia-
tive this project would not have taken place.
We also want to thank the World Public Forum more generally
for providing crucial financial support and the occasions for subsequent
discussions in Rhodes and Yerevan. Colleagues at each of these meetings
made valuable suggestions that improved different chapters. Dr. Vladimir
Kulikov provided valuable administrative support. We are also grateful to
Professor Piotr Dutkiewicz of Carleton University, who played a crucial
role in formulating and carrying out plans for the meetings and subse-
quent volumes. With Dmitri Trenin, Professor Dutkiewicz has edited a
7
volume on the future of Russia that is an important companion to the
Possible Futures series: Russia: The Challenges of Transformation.
The Editorial Department of the Social Science Research Council
provided excellent support. We thank especially Paul Price and Alyson
Metzger. Sara Maria Acosta provided administrative support at the SSRC
with efficiency and aplomb. Likewise, our editor at NYU Press, Ilene
Kalish, led a special effort to bring these books out quickly so they could
inform continuing discussions. We are pleased by NYU Press’s embrace
of the idea of “real-time social science.”
8
series introduction
From the Current Crisis to Possible Futures
Craig Calhoun
The phrase “global financial crisis” has been repeated ten million times
since March 2008. The rich countries of the twentieth century have been
plunged into the worst recession since the Great Depression. Even after
massive infusions of taxpayers’ money, financial institutions remain shaky.
Major banks have failed; sovereign states in Europe face bankruptcy with
unpredictable consequences for the European Union. Recovery remains
elusive, and perhaps “recovery” is not the right word, for this crisis may
mark a dramatic moment in a more basic shift of economic momentum
and political power from the rich countries of the twentieth century—
especially in Europe and North America—to more rapidly developing
countries in what had long been capitalism’s semi-periphery. The crisis
should focus our attention not just on the immediate events that precipi-
tated it but also on the potential for deeper transformation. A recovery to
something like the patterns in place before 2008 is only one of the pos-
sible futures open now, and not the most likely.
The word “crisis” can easily be abused. It carries a sense of urgency
belied by the willingness of politicians, investment bank managers, oil-rig
supervisors, and many of the rest of us to put off decisive action. It sug-
gests the necessary climax to a natural process, like the turning point in
a disease. When a high fever breaks, if a patient hasn’t been killed, he or
she usually recovers. Yet when a social problem is called a crisis, neither
Series Introduction 9