Both crises marked a severe setback for the global power of the United States, which had driven NATO expansion and forced through the liberalization of financial markets. More broadly they challenged the consensus that had reigned since the collapse of the Soviet bloc in 1989 that a US-orchestrated liberal capitalist order could offer the world peace and prosperity. Already badly damaged by the Iraq debacle, this consensus has now suffered potentially fatal blows.
In Bonfire of Illusions Alex Callinicos explores these twin crises. He traces the credit crunch that developed in 2007-8 to a much more protracted crisis of overaccumulation and profitability that has gripped global capitalism since the late 1960s. He also confronts the interaction between economic and geopolitical events, highlighting the new assertiveness of nation-states and analysing the tense, complex relationship of interdependence and conflict that binds together the US and China. Finally, in response to the revelation that the market is not the solution to the world's problems, Callinicos reviews the prospects for alternatives to capitalism.
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"As one would expect from Callinicos, this book is forensic in its detail and is a useful tool in the armoury of anyone who wishes to see beyond the platitudes of the yellow press."
"A powerful critique; a serious engagement with a crucial contemporary debate."
Political Studies Review
"An important book for anybody wanting an introduction to how Marxist political economy can help to understand the times in which we live."
Marx and Philosophy
"The crisis of 2007-9 is an event of historic importance that has affected economy, society and politics. Callinicos analyses its causes within the broader development of capitalism in recent decades. Particularly relevant is his stress on financialisation as well as the implications he draws regarding the balance of imperial power across the world. Written with the author's customary skill, this is a welcome contribution from the left to the public debate."
Costas Lapavitsas, SOAS, University of London
Preface and Acknowledgements ix
Introduction: How the World Changed in 2008 1
1 Finance Humbled 20
What is fi nancialization? 23
Three perspectives on financial crises 34
More than just a financial crisis 50
Dilemmas of recovery 83
2 Empire Confined 95
The state roars back 95
Collision of empires 106
Orchestrating disharmony 121
Conclusion: Regime Change or System Change? 127
The end of neoliberalism? 127
State, market and planning 134