Temporary Economic Crises

377 Pages·2022·2.973 MB·English

by  Shahzavar Karimzadi

Temporary Economic Crises
In traditional theory of economic crisis, and in all its manifestations, there is
no fundamental difference between economic disorder and economic crisis:
the two types of economic turmoil are both considered temporary states.
This book is a methodical study of deep-seated causes of economic crises.
The aim of the book is to explain the key difference between economic
disorder and economic crisis. Its key argument is that economic disorder is
a permanent condition, whereas economic crises are a series of transitory
periods. Economic crises, unlike economic disorders, are acute and frenzied
volatilities that are unpredictable and short-lived. Humans cannot survive in
a condition of perpetual economic crises but can only accommodate life un-
der unremitting economic disorders. The book also explores the root cause
of economic crisis. Unlike the received wisdom in economics, this book
looks at the root cause of such hysterical economic turbulences as a result of
an innate propensity of human fallibility. The final section of this book looks
at the ramifications of this alternative perspective on macroeconomic policy
formation and implementation.
This book is a major contribution to the literature on economic disorder
and crises and will be of great interest to readers of economic theory, philos-
ophy of economics, and the history of economic thought.
Shahzavar Karimzadi is Senior Lecturer in Economics at the University of
Hertfordshire Business School, UK.
Routledge Frontiers of Political Economy
Macroeconomic Modelling, Economic Policy and Methodology
Economics at the Edge
Edited by Mikael Randrup Byrialsen, Hamid Raza and Finn Olesen
Economics, Anthropology and the Origin of Money
as a Bargaining Counter
Patrick Spread
Bernard Schmitt’s Quantum Macroeconomic Analysis
Alvaro Cencini
Blockchain and the Commons
Vangelis Papadimitropoulos
Globalization and the Decline of American Power
The Political Economy of the American Fall
Cyrus Bina
Marx and Le Capital
Evaluation, History, Reception
Edited by Marcello Musto
Permanent Economic Disorder
Shahzavar Karimzadi
Temporary Economic Crises
Shahzavar Karimzadi
Money and Capital
A Critique of Monetary Thought, the Dollar and Post-Capitalism
Laurent Baronian
For more information about this series, please visit: www.routledge.com/
Routledge-Frontiers-of-Political-Economy/book-series/SE0345
Temporary Economic Crises
Shahzavar Karimzadi
First published 2023
by Routledge
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© 2023 Shahzavar Karimzadi
The right of Shahzavar Karimzadi to be identified as author of this
work has been asserted in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical,
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-38697-3 (hbk)
ISBN: 978-1-032-38698-0 (pbk)
ISBN: 978-1-003-34635-7 (ebk)
DOI: 10.4324/9781003346357
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Contents
Acknowledgements vii
Introduction 1
1 Cyclonic ebbs and flows of trade 11
Introduction 11
From prudent to enthusiast and deranged traders 14
The Dutch tulip crusaders 22
National sovereignty and the state finance 33
The end of the medieval era 42
Equality before the guillotine 51
Power of appropriation and expropriation 56
Conclusion 64
2 High and low times of industrialization 67
Introduction 67
The cradle of industrialization 69
Banking and money economy 74
Great wars, revolutions, and depressions 80
Hyperinflation and economic depression 89
Empires and the Frankenstein states 97
The generations of wars 112
The pandemic of globalization 119
Conclusion 134
3 Crypto-economy and trade cycle 138
Introduction 138
The last decades of the last millennium 139
The new right and the old left 148
The 2007–2008 credit depression 154
vi Contents
Altruistic or self-serving subprime mortgage 161
The predatory financial products 168
Conclusion 174
4 Over-trading, trade cycles, and crises 178
Introduction 178
Parting with self-imposed blind faith 180
From trade to over-trading 183
Consolidation of three trends 187
No poor on nature’s banquet 194
The original model of capitalism 201
From trade cycle to economic crisis 207
Two crises and three illusory capitalisms 215
Conclusion 221
5 Economic crises and human propensity to extremism 224
Introduction 224
The root cause of the economic crisis 226
Human propensity to extremism 231
Monotheism, the extreme end of beliefs 238
Atrocities – consigned to oblivion 246
Embedded extremism in economics 252
Conclusion 256
6 Coping with unknowns and human follies 259
Introduction 259
Digression from fatalism 262
Every person can acquire knowledge 267
Perfect and imperfect truths 272
Liberty and pursuit of self-interest 279
Economics of might is right 289
Fixed known and the changing unknown 294
Permissible and impermissible boundaries 304
Extremism and survival 313
The end, the means and adaptability 322
Conclusion 334
Bibliography 339
Index 359
Acknowledgements
I would like to express my sincere gratitude to Connor Hayes for reading
Chapter 6 and for his valuable comments. My deep appreciation goes to my
partner, Angela Harvey, for drawing my attention to the many shortcomings
in the first draft of the book. I wish to thank Frank Currie for his constant
support with my teaching. My thanks are also due to Radio Gwank for per-
mission to use their interview with ND. Last but foremost, I am indebted to
Andy Humphries from Routledge, the publisher, for his continuous help and
guidance.

Introduction
Human history is blighted by the plague of extremism: the occupying of
one community by another and the enslavement of the defeated commu-
nity, imprisonment, torture and killing of the heretics, complete violation of
women’s rights – the list of such extreme atrocities is endless. In other spheres
of society, we find the rule of tyranny by kings, queens, emperors, military
dictators, oligarchs, theocratic rulers, and other undemocratic rulers. Most
organized human societies have fallen victim to imperial conquest and colo-
nization one way or another. To this day many human societies are wrecked
and deformed by idiotic religious wars and intolerance. In these societies,
mindless obedience to unfounded religious fairy tales is the dominant order
of the power structure. In this haunted reign of irrationality, there are rulers
and their subjects that are easily taken in and are ready to kill and be killed
for their beliefs. Our world is still dominated by all sorts of discrimination
and phobias. Racial, sexual, age, and class discrimination are endemic in all
repressive societies. There is a prevalence of ignorance amid a profusion of
knowledge. The extent of the division of labour, employment, and special-
ization are stretched to the most extreme boundaries of possibilities, during
which the most essential and basic knowledge, skills, ethical values, justice,
freedom, equality, human relations, history, and cooperation are g enerally
neglected and overlooked. Economists write about the economics of one
country without having any basic knowledge of the colonial geopolitical
construction of that country. The culture that has enslaved women is put on
a par with the culture that strives for gender equality and empowerment. The
economic prescriptions offered for both cultures by the hegemonic discourse
are impossible to tell apart.
The impetus that sways in the realm of systematic ignorance, during
boundless opportunities for learning, is the curtailment of knowledge to se-
curing one’s job. Learning, by and large, is not for the sake of acquiring
knowledge and understanding but for other ends. In politics, it is not con-
viction that rules but career enhancement. Journalism is dominated by those
who are promoting power, prestige, status, and wealth of big businesses and
powerful rulers of the establishment rather than digging into secrets, corrup-
tion, and crimes of those in power to inform the public. The cost of being on
DOI: 10.4324/9781003346357-1