I have just published Mary Kaldor's latest column, which I think makes a really valuable contribution to our view of the financial crisis. The economics commentary, however much it professes to have learnt its new growth theory from Schumpeter, does not think about the actual characteristics of the technology development phases we are in or relate this to the current crisis.
MK's view (which borrows much from Carlota Perez) is that this crisis should be understood in relation to the new technologies as the 1930s crisis was understood in relation to Fordism and mass consumerism. MK sees deregulation and liberalism not just as the advance or retreatof some ideology, but rather as a phase which is suited to the early development of a technological/economic/institutional epoch --- a phase which finds justifications to shake off institutions from a prior age. But initial investments and returns are not sustained, and the financial sector becomes "creative" in the search for the return it has started to consider to be rightfully its own. This is what happened after the dot com bust and the mass move of finance into the extraordinarily unexciting business of (over)-financing home building.
One of the nice things about this way of looking at the crisis and at economic history is that it contextualises economic ideologies and offers a creative synthesis that might take us beyond state/market arguments. It encompasses each in different phases of the epochs of development.It also allows us to look at the 1930s asking not so much about the lessons in terms of technicalities of money supply management, but more in terms of the political and institutional shifts that took the world economy beyond 1930. Can we hope that creative destruction might be a little less destructive this time around?
I'd still like to see the analysis become more specific. From the vantage point of the early 1930s, could one see that Fordism would require/engender national welfarism, American economic hegemony, etc? And if we can, what does the nature of new information and energy technologies imply is needed for the next epoch? World-wide welfarism? Democracy support? A new finance infrastructure, including learning from micro-finance? Anti-consumerist values ...
Is there a Schumpeterian who would like to stick their neck out with a forecast?
