In Aftermath: The Cultures of the Economic Crisis (Oxford, 2012), Manuel Castells, Joôa CaraÇa, Gustavo Cardoso (editors) and a number of colleagues from the social sciences set out to provide some insight into the financial/economic crisis that flared up in 2008 (and has still not run its course). More than that, as the title of the book intimates, they also uncover the “cultures” that have grown up in the wake of the crisis, to be able to get a sense of where the world is moving to. And they conclude that we may very well be in a major transitional phase towards something new. In the editors’ words (Introduction):

“The crisis of global capitalism that has unfolded since 2008 is not merely economic. It is structural and multidimensional. The events that took place in its immediate aftermath show that we are entering a world with very different social and economic conditions from those that characterised the rise of global, informational capitalism in the preceding three decades. The policies and strategies developed to manage the crisis – with mixed results, depending on the country – may usher in a sharply different economic and institutional system…”

One of the historical ironies that they draw attention to, concerns the rise of the “culture of freedom” after the 1970s, on the one hand, and the entrepreneurialism that grew from the individualism that eschewed collective social action as well as bureaucracy, on the other. Together with the technological innovations emerging from university campuses at the time, this anti-corporate establishment “culture of freedom” laid the groundwork for a new kind of economic system (compared to the preceding Keynesian capitalism), marked by privatisation, liberalisation and deregulation – in short, all those economic practices that launched free market capitalism in its globalising, informational guise, which would (and here is the irony) breathe life into new kinds of multinational corporations. This was further enabled by the new computer technologies which formed the basis of global financial exchanges along increasingly globalised informational networks.

The social structure that emerged in tandem with these developments was theorised by Manuel Castells in a trilogy of books on The Information Age (the first of which, The Rise of The Network Society, appeared in 1996), the continuing conceptual relevance of which is borne out by its explanatory power in relation to the recent financial crisis. In the Preface to the second edition (Blackwell, 2010) of the first volume Castells puts this to the test, as it were, and confirms that the salient developments of the last decade do indeed bear out the accuracy of his structural analysis of major social trends in 1996. Specifically, as far as the global financial crisis goes, he points out that it “…was the direct consequence of the specific dynamics of this global economy”, as earlier analysed by him in The Rise of The Network Society.

Castells reminds his readers that, taken together, six factors generated the crisis: One, “the technological transformation of finance,” referred to earlier, which gave financial institutions the “computational capacity to operate advanced mathematical models” (instilling a false sense of confidence in these institutions, as it turned out) supposedly capable of “managing” the mind-boggling complexity of the interconnected global financial markets via directly effective electronic transactions.

Two, the liberalisation and deregulation of the world of finance, mentioned earlier, seriously undermined the ability of national regulators to control the global flow of capital. Three, the “securitisation” of all economic activities, assets and organisations had the effect of elevating financial valuation to the pre-eminent position of global standard for assessing the value of companies, of governments and even of countries’ economies (taking Marx’s insight into the reduction of use-value to exchange value by capital to a new level). The financial technologies in question generated the invention of what Castells describes as “numerous exotic financial products” (such as securitised insurance, including credit default swaps, futures, derivatives, and options), which, given their intertwinement, increased in complexity to the point where virtual capital made transparency so problematical that “accounting procedures became meaningless”.

Four, the “imbalance” between capital accumulation in developing countries such as China, and capital borrowing on the part of rich countries (such as the US), resulted in excessive lending practices involving consumers, cultivating a culture of debt and increasing the financial vulnerability of the lending institutions. Five, in light of the interpenetration of financial markets and securities, the mortgage crisis that started in the US in 2007 had a ripple effect throughout the global financial system (partly because financial markets only partially obey the logic of supply and demand, being mainly driven by what Castells calls “information turbulences”). Six, the economy (as well as their own bonuses) was “pumped up” by adventurous, if not reckless brokers because of the absence of supervision of financial practices such as securities trading.

In the Introduction to Aftermath Castells and his co-editors (backed up by numerous references to other researchers’ work) can therefore state confidently that:

“…the current crisis stems from the destructive trends induced by the dynamics of a deregulated global capitalism, anchored in an unfettered financial market made up of global computer networks and fed by a relentless production of synthetic securities as the source of capital accumulation and capital lending. Furthermore, the combination of deregulation and individualism as a way of life led to the rise of a new breed of financial, corporate managers focused on their own short-term profits as the guiding principle of their increasingly risky decisions…They rationalised their interests by building mathematical models to sophisticate, and obscure, their decision-making process while disregarding the interest of their shareholders, let alone those of society, or even capitalism at large…The ‘me first’ culture is now a key ingredient of business management…”

They further point to the irony, that the implosion of this type of capitalism that started in 2008 was only arrested by the intervention of the state (despite it being earlier relegated to oblivion by the defenders of “market fundamentalism”), which entailed re-regulation of financial institutions. The rest is fairly well known – the end of easy credit (all too familiar in SA, too), a consequent drop in consumption and demand, economic recession, an increase in unemployment, emergency stabilisation of the financial system by governments with tax money and (ironically) loans from financial markets, in the process incurring colossal public debt. The further irony is that the financial institutions that have been revivified by public money, have refused to lend to governments which are caught in a “budget deficit spiral”, or have demanded an exorbitant “risk premium” in addition to market interest rates. Castells (et al) summarises the causally linked events as follows:

“In short: a financial crisis triggered an industrial crisis that induced an employment crisis that led to a demand crisis that, by prompting massive government intervention to stop the free fall of the economy, ultimately led to a fiscal crisis.”

And the authors of this important book leave one in no doubt that this fiscal crisis is still deepening, straining governments’ ability to control or manage it, and giving rise to a variety of “cultures”, including that of recurrent social protests, populist movements and the culture of “defensive individualism”, which, in its turn, exacerbates racism and xenophobia (think of the fundamentalist “Golden Dawn” party in Greece). At the same time, however, they draw attention to the emergence of “cultures of hope” for a new social dispensation alongside of the “cultures of fear”. This should not surprise anyone, given that, unavoidably, people have to adapt their way of life to “the constraints and opportunities arising from the crisis”.


  • As an undergraduate student, Bert Olivier discovered Philosophy more or less by accident, but has never regretted it. Because Bert knew very little, Philosophy turned out to be right up his alley, as it were, because of Socrates's teaching, that the only thing we know with certainty, is how little we know. Armed with this 'docta ignorantia', Bert set out to teach students the value of questioning, and even found out that one could write cogently about it, which he did during the 1980s and '90s on a variety of subjects, including an opposition to apartheid. In addition to Philosophy, he has been teaching and writing on his other great loves, namely, nature, culture, the arts, architecture and literature. In the face of the many irrational actions on the part of people, and wanting to understand these, later on he branched out into Psychoanalysis and Social Theory as well, and because Philosophy cultivates in one a strong sense of justice, he has more recently been harnessing what little knowledge he has in intellectual opposition to the injustices brought about by the dominant economic system today, to wit, neoliberal capitalism. His motto is taken from Immanuel Kant's work: 'Sapere aude!' ('Dare to think for yourself!') In 2012 Nelson Mandela Metropolitan University conferred a Distinguished Professorship on him. Bert is attached to the University of the Free State as Honorary Professor of Philosophy.


Bert Olivier

As an undergraduate student, Bert Olivier discovered Philosophy more or less by accident, but has never regretted it. Because Bert knew very little, Philosophy turned out to be right up his alley, as it...

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