This rise of finance was accompanied by a great increase in the frequency of financial crises. As Andrew Glyn said in Capitalism Unleashed, "Crises involving banking crises, which had almost died out in the Golden Age, reappeared in strength from 1973 onwards and became practically as frequent after 1987 as during the inter-war period". 12 Martin Wolf noted " 100 significant banking crises over the past three decades" .13 Yet after each crisis the system as a whole seemed to revive again, so that on the eve of its greatest crisis there was talk of record growth rates and predictions of ever faster growth in the future. Finance, in fact, acted like a drug for the system, seeming to give it great energy and creating a sense of euphoria, with each brief hangover being followed by a further dose until the metabolism as a whole suddenly found itself being poisoned.
The debt economy and the great delusion
The growth of finance was never something separate from what was happening to the productive core of the system, but was a product on the one hand of its internationalisation, on the other of the long drawn out slowdown in accumulation.
The first big growth of international finance in the 1960s was a result of the way the growth of international trade and investmentand US overseas military expenditure associated with the Vietnam War-led to pools of finance ( "Euromoney") which had escaped the control of national governments. The next big growth came with the recycling of massively expanded Middle East oil revenues through the US banking system-revenues that were a product of the increased dependence of productive capital on Middle East oil.
280
The New Age of Global Instability