The rise of neoliberalism resulted in relative stagnation and wage losses, whereas profits rapidly increased. Neoliberalism therefore is a class struggle project of the ruling class aiming at increasing profits by decreasing wages with the help of strategies such as deregulation of labour laws, precarious labour conditions, welfare and public expenditure cuts, tax cuts for the rich and companies, the privatisation of public goods, the global offshoring and outsourcing of labour, etc. Many working families had to take out loans, consumer credits, and mortgages in order to be able to pay for their everyday life requirements. At the same time, capital investment into high-risk financial instruments boomed because the growing profits needed to be reinvested. Workers’ debts were packaged into new financial instruments, so-called asset-backed securities, mortgage-backed securities, collateralised debt obligations, and credit default swaps. The financial market promised high financial gains, but the profits in the non-financial economy could in long run not fulfil these growth expectations, which created a mismatch between financial values and the profits of corporations and the expectations of shareholders and the reality of capitalist accumulation. The results were financial bubbles that burst in the 2008 crisis.
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Themes