The Causes Of The 2008 Global Financial Crisis

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This essay will examine the causes of the 2008 Global Financial Crisis (GFC) from a Marxist perspective. This paper will specifically examine and critique how Marx’s Theory of Crisis can be applied to understand and interpret the underlying structural causes of the 2008 Global Financial Crisis.

Karl Marx is the father of the political and economic theory of Marxism. Marxism is essentially an analysis of capitalism (Trainer 2010). Marx regarded capitalism as deeply undesirable and he sought to bring an end to capitalism through a revolution and the creation of a future communist society (Trainer 2010). However, as Trainer (2010) notes, many people in the Western World do not agree with Marx’s views about capitalism and actually regard capitalism as a highly desirable economic system and are deeply opposed to the idea of a revolution or the formation of a communist society to destroy capitalist economies. Marx’s Theory of Crisis, nevertheless, provides an extremely reasonable and sound explanation of the causes of the 2008 GFC, and of global economic crises in general.
Marx’s Theory of Crisis encompasses the ideas, values and views of many other key economic theories that have been propounded by world leading and renowned economists over the past few centuries. For instance, in order to understand the essence
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This is a crucial factor for what caused the 2008 Global Financial Crisis: as the ratio of capital value to variable value was increasing at a faster rate than the rate of surplus value for many years in the lead up to the crisis (Bowman 2009). Thus, business profits had been in steady decline in the years leading up to the GFC and it was inevitable that as long as the rate of profits continued to fall then a financial collapse and economic crisis would

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