Eric Hobsbawm: Global financial crisis is the "end of the era" for capitalism

Historians in the News

One of Britain's best known historians believes the global financial crisis is the "end of an era" for capitalism and a long overdue return to government intervention.

Eric Hobsbawm, the 91-year-old Marxist historian, author and academic, told MSN Money the past two decades of unfettered capitalism had been as damaging as Soviet economic totalitarianism.

In his responses to MSN Money's questions, Hobsbawm predicted that far from being a hiccup or correction of the markets, "the present crisis is certainly the end of the era in the development of the global capitalist economy."

Hobsbawm's views on the present crisis present a radical counterpoint to mainstream financial journalism and uncover potential causes and repercussions that have not received much coverage.

The media and economic analysts have given many explanations of why the crash happened and who is to blame. Few have blamed free market capitalism itself as the cause of its own inevitable demise. Many point instead to elements within the system that could have been controlled better.

The New York Times, for instance, argued that Alan Greenspan's support for derivatives while Federal Reserve chairman from 1987 to 2006 "helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences." It said that if Greenspan had acted differently "the current crisis might have been averted or muted."

Hobsbawm in contrast told MSN Money that he believed a "free market theology," a sort of blind faith in capitalism, was the root cause.

In the e-mail interview, Hobsbawm said that running global economies on an "effectively unregulated basis" is as doomed to failure as "the project of a totally state-run planned economy in the Soviet systems." He said he welcomed state intervention as a "return to common sense"....
Read entire article at http://money.uk.msn.com

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Lou McDade - 11/6/2008

An additional point that should have been stated by Mr. Hobsbawm is that unbridled consumerism is dead. With respect to the American consumer it is widely known that America is a debtor nation. If the American economy runs on debt and banks fear to lend and consumers fear to borrow, how can anyone be surprised at a downward spiraling economy.
The days of "keeping up with the Jones's" are over. Living beyond our means must be put to a stop. This herd mentality of "I must have what my neighbor has" shall come to an end.
For those that think one man (the president) is going to lead a country out of the mess that many in the country created, are delusional.
The American consumer culture will seriously have to adjust its lifestyle for the short and long term. The economy will take a long time indeed to recover.