12/22/2023 0 Comments How did the bank stay afloat bust![]() ![]() To stay in the game capitalists had to borrow money. The scale of investment in new machines and buildings needed could no longer be funded simply by the money made from their own profits in previous rounds of production. Even when Marx was writing in the mid 19th Century, companies had already grown to the point where they required credit in order to invest and expand their businesses. This is because financial crises are merely a symptom of a wider crisis of profitability in the whole economy.Ĭredit is essential to the functioning of capitalism. Pointing to the financial sector as the creator of the crisis, many argue that we must tame the credit system.īut Marxists argue that financial regulation will neither fix nor prevent economic crises. The collapse of investment bank Lehman Brothers in September 2008 was the event that triggered the global economic crisis. Jean Parker begins a series on issues in economics by looking at credit and banking ![]()
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