The Crisis Of Financialization From The Core To The Periphery
Abstract. In this paper I give a structuralist analysis of the financial crisis. First I seek to refute the argument suggesting that the main reason behind the crisis was government failure in the United States. Deregulation, by amplifying market failures, was of fundamental importance from the point of view of the crisis. However, deregulation cannot be understood without an examination of the broader social context, the changes that occurred in the capitalist structure and the consequent changes in the power structure. The term 'financialization' denotes the changes in the social and economic structure which give the background to and the context for a better understanding of financial deregulation and liberalization. The particular class and elite coalition maintaining the Keynesian-welfare consensus fell apart; the middle class now relies to a lesser degree on the lower classes for solidarity, while the financial elite gained dominant influence within the economic elite. In the second part of my paper I continue with an analysis of how the financial crisis impacted the Eastern European semi-periphery and especially Hungary. Contrary to the popular view that blames the erroneous macro-economic policy of the governments for the countries' failure, I highlight that the crisis of the peripheries is rooted in the structure of global capitalism and the mistakes in the adjustment strategy of the countries concerned. Excessive dependence on financial globalization and a growth strategy that had built on the inflow of hot money have led to a fragile economic model just as much as the process of financialization in the core countries. I conclude my paper with presenting a number of policy recommendations.
Neoliberal best student is the weakest link in the crisis - SOCIAL WATCH
Írta: Benyik Mátyás
Despite the fact that it was the first country in Eastern Europe to adopt International Monetary Fund prescriptions in 1982 and that it was more highly developed than its neighbours when it embraced a market economy, Hungary is now the weakest economy in the region. The reasons for this are manifold and have led the country to waver between potential social upheaval – if a change of direction is not made – and the total collapse of a very vulnerable economy. The phantom of right-wing extremism lurks in the background, fed by popular discontent.
Worsening social circumstances and exclusion in Hungary
Írta: Farkas Péter
After the capitalist transition (1989), 1.5 million of the 4.8 million jobs were terminated, and in April 2010 there were still only 3.7 million workplaces. The activity rate of the population capable of work is only 54-55 percent. The main reason for the impoverishment of a considerable part of the population is unemployment. The average real income per capita reached the level of that before the transition only in the early 2000s. However, the income and social differences have increased, a big part of Hungarian society is considered poor (see below). Under the circumstances of the present crisis the situation has worsened.
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