The Crisis of Capitalism and the Downfall of the Left

The global financial crisis (GFC) that ended the first decade of the twenty-first century was the most severe crisis in the global financial and economic system since the Great Depression (Sorkin, 2009: Financial Crisis Inquiry Commission, 2010). Only extraordinary measures by central banks and governments prevented it from being a replay of the Great Depression. These extraordinary measures required politicians to renounce long-held beliefs to cope with the emergency; in the United States, for example, the administration of George W. Bush took into public ownership or took extensive stock holdings in failing banks and the giant insurance company, AIG. Soon after, his successor, President Obama, effectively nationalized one of the three major US auto companies (General Motors) and arranged the sale of another, Chrysler, to the Italian auto company, Fiat. These were extraordinary steps for any US president to take, and that they were taken initially by a determinedly conservative Republican president was all the more startling. These measures might also prompt some re-thinking in the academic world. For example, these policy responses were scarcely compatible with the popular ‘Varieties of Capitalism’ (VoC) school which asserted the dominance of liberal economic beliefs and practices in the US (and UK) (Hall and Soskice, 2001).