Aftershocks: Economic Crisis and Institutional Choice (WRR)
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Although it would be premature to presume to identify the exact repercussions of the current economic crisis, it is clear that it will have profound effects in the political, economic, and social spheres. Written in the midst of the deepest economic crisis since the Great Depression, Aftershocks contains twenty-four essays—based on interviews with scholars, prominent European politicians, and leading figures from business and banking—that reflect on the origins of the crisis as well as the possible social, economic, and political transformations it may engender. Among the many contributors are Barry Eichengreen, Tony Atkinson, David Soskice, Nancy Birdsall, Amitai Etzioni, Helmut Schmidt, and Jacques Delors.
deregulation was a new departure from the previous political economy of the post-war era. Until the 1980s, national governments had held themselves responsible for increasing societal affluence. This policy paradigm was expressed through a variety of welfare institutions and elements of non-market regulation. Many of these institutions and arrangements were dismantled in the 1980s, a process spearheaded by the United States in partnership with Britain, whose ideological support was an important
these trends are the result of the political-economic dogmas of the last quarter-century. The Washington Consensus not only favoured the liberalisation of the financial system, it also was a doctrine that allowed little room for political governance, especially in financial and economic affairs. To ensure the freedom of financial flows, the Washington Consensus prescribed structural reforms aimed at increased flexibility and minimal state intervention. This was paired with a misperception of what
the middle class, while simultaneously jeopardising the immediate security of the most vulnerable in society, could be politically dangerous, triggering a decline in societal cohesion and increasing discontentedness. Another potential repercussion of a long-lasting recession is increased interethnic tension. As the middle class becomes discontented and welfare recipients become vulnerable to state cutbacks, tensions between natives and non-natives are likely to increase. While this is likely to
hierarchy are basic creature comforts; as these are sated, more satisfaction is drawn from affection and self-esteem, and finally, from selfactualisation. It follows that as long as one’s consumption is focused on satisfying the need for creature comforts, it meets not only essential but the most basic human needs. Obsession with goods and services takes place once these are used to try to satisfy the higher needs. Consumption turns into an ‘ism’ when material objects are used to express
to human kind. The tendency was towards a completely liberalising agenda. This was an era of true globalisation, and the unregulated international market reigned supreme. Under this paradigm, the state played a minimal role, serving as only a ‘nightwatcher’ for economic interests. Aside from national defence, protection of property rights, and administration of justice, the state was seen as an impediment to growth. Although this model still survives today in libertarian circles, it was largely