... 40 years ago, faced with the "stagflation" crisis of economy, Western countries chose neoliberalism. By adopting neoliberalism, financial monopoly capital gradually usurps political, economic and cultural power in Western capitalist countries. Capital does away with social barriers and facilitates production, exchange, distribution and consumption, reshaping the world in keeping with its nature. The last round of global financial and economic crisis is a vehement outbreak of this contradiction.

In fact, the financial crisis in 2008 declared the failure of neoliberalism, and also provided a historic opportunity for Western countries to adjust their policies accordingly. However, financial capital pulled itself out of the crisis in the name of pumping up the market with public funds. As a result, financial capital not only hasn't suffered setback but has grown stronger since the crisis.

In this process, in order to save financial capital, the level of national debt in Western countries rose sharply, which led to the proportion of national debt in GDP of these countries increasing by an average of 30 percentage points. After that, the US and other countries took further tax cuts to stimulate the economy, which aggravated the fiscal crisis. Meanwhile, Western countries generally adopt extremely loose monetary policies. On the one hand, interest rates are rapidly reduced to a very low level. On the other, a huge amount of capital is injected into the market through multiple rounds of monetary easing. The aim of this policy is to make it easier for businesses and households to borrow at a very low cost, and then investment and consumption can be boosted. However, due to the economic downturn and pessimistic expectation for the future, many enterprises and families try to de-leverage and cut debt. And the slow growth of investment and consumption results in a long-term stagnation of the economy...

... What makes matters worse is that the new wealth of many countries flows to the rich on a large scale, and the gap between the rich and poor widens. What’s more, it’s hard to accept that many reform measures urgently needed by Western society that aim to curb financial speculation and fraud and alleviate contradictions of new liberalism cannot be carried out because of resistance from monopoly capital. The financial and economic crisis in Western countries is gradually turning into a serious social and political crisis. What's more, Western mainstream ideology, including neoliberalism, can neither explain nor solve the current systematic and institutional contradictions of capitalism, and the cultural crisis is becoming more and more intense.

The author is associate dean at the School of Marxism, Tsinghua University. opinion@globaltimes.com.cn

https://www.globaltimes.cn/content/1177928.shtml