The Neoliberal Era and the Financial Crisis in the Light of SSA Theory

Abstract

Social structure of accumulation (SSA) theory suggests that economic growth in capitalist countries is characterized by lengthy periods of relatively vigorous growth, often amounting to several decades, followed by lengthy periods of relatively sluggish growth or stagnation. The periods of vigorous growth are marked by institutions that taken as a whole are favorable to the accumulation or investment process. The internal contradictions of those institutions, interacting with changes in the external environment, eventually bring the period of prosperity to a close. At that point, a period of intense social conflict is ushered in, accompanied by economic stagnation, until a new set of institutions that favors accumulation can be established. The neoliberal era, from 1980 to 2007, represents a distinctive period of capitalist development in the United States, one with its own characteristic institutions. This essay examines the major institutions of the neoliberal era and their internal contradictions. It shows how these led to the financial crisis of 2007-2009, and examines the conflicts exposed by the crisis. The essay attempts to bring together an empirical account of the financial crisis with a theoretical framework in which the crisis can be most readily understood.