In his rigorous review of Crisis in the Eurozone, written by Costas Lapavitsas and his colleagues from the Research on Money and Finance group, Alex Cistelecan bounces the book’s arguments off Jürgen Habermas’s The Crisis of the European Union.
What comes out of this skillful comparison is the depth of Lapavitsas’s arguments about the nature of the problems that the European Union is facing at the moment. Unlike Habermas, whose focus is mainly on the moral dimension of a problem not even dubbed a “crisis”, the kernel of Lapavitsas’s analysis is to emphasize “the profound and structural nature of these problems, and of the underlying contradiction built into the European legal and institutional construction.”
Costas Lapavitsas has written an article for the Guardian examining the surge of financialization and its “penetration … into every nook and cranny of society”. In the article he explores some of the ideas present in his latest book, Profiting Without Producing, as well as those investigated in Crisis in the Eurozone. In this new article, Lapavitsas argues that since the financial crisis, mature economies have shifted toward accepting and even perpetuating overwhelmingly dominant financial sectors.
Mainstream economics has not come up with any fresh ideas, or new methods of investigation after the gigantic crisis of 2008-9. Nothing has fundamentally changed, and suggestions that something is not quite right with the discipline are usually met with bafflement. The real issue, however, is not to point out the weaknesses, or the intellectual rigidity of mainstream economics, a task that has been repeatedly performed in recent decades. It is, rather, to produce analysis that is genuinely different from the mainstream, while remaining true to economics as a discipline.
In this light, the kind of economics that I find persuasive would have the following features:
In a recent article in the London Review of Books, Susan Watkins - through a reading of several recently published texts - gives a critique of the Troika's hegemony over the European single currency:
Seen from the besieged parliaments of Athens and Madrid, from the shuttered shops and boarded-up homes in Lisbon and Dublin, the single currency has turned into a monetary choke-lead, forcing a swathe of economies – more than half the Eurozone's population – into perpetual recession.