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Flaws in the Marxian Explanations of the Great Recession

Author

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  • Ismael Hossein-zadeh

    (Economics, Drake University, West Des Moines, IA, USA)

Abstract

Marxist views of the relationship between financial and real cycles suffer from three major weaknesses: (a) financial developments are almost always reactions to real sector developments; (b) financial crises can trigger but not cause real sector crises; and (c) the 2008 financial crash played only a triggering, not causal, role in the ensuing Great Recession. I would argue, by contrast, that (a) in the era of big finance, finance capital does not necessarily shadow or merely react to industrial capital, it also behaves independently; (b) financial sector crises can be transmitted (through debt deflation) to the real sector; and (c) the 2008 financial crash played not only a triggering but also a causal role in the ensuing Great Recession.

Suggested Citation

  • Ismael Hossein-zadeh, 2014. "Flaws in the Marxian Explanations of the Great Recession," Review of Radical Political Economics, Union for Radical Political Economics, vol. 46(4), pages 473-480, December.
    • Handle: RePEc:sae:reorpe:v:46:y:2014:i:4:p:473-480
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    Citations

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    Cited by:

    1. Hasan BAKIR & Görkem BAHTİYAR, 2017. "Great Recession, Financialization and Marxian Political Economy," Sosyoekonomi Journal, Sosyoekonomi Society, issue 25(33).

    More about this item

    Keywords

    debt deflation; financial bubbles and bursts; Great Recession; crisis theories;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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