From the crisis of distribution to the distribution of the costs of the crisis

The aim of this chapter is to analyze the rise in inequality as a main cause of the global crisis and discuss how the crisis is further increasing the inequality at the expense of labor. The neoliberal policies and the deterioration in labor share have created a fertile ground to bury the seeds of a major global crisis together with the risky developments in the credit, housing and security markets. Beneath the financial aspects of the crisis lie the long-term contradictions of neoliberalism: a declining wage share, thus rising profit share, which generated a potential realization crisis; and shareholder value orientation as a consequence of the finance-dominated regime, which changed the relationship between profits and investments, which also undermined the long-term growth potential of the economies.