Crisis

The financial crisis of 2007–8 was the first crisis of the global commodity system and therefore was the first crisis of its kind. ¹ To say this is not to deny that there have been previous economic crises whose scale and reach of consequence were at least as significant as those of the 2007–8 crisis. The economic crisis following the Wall Street crash of 1929 is a case in point. The difference, rather, lies in the locus of crisis origin. In all previous crises that locus was invariably to be found in a particular national domain, even when, as in the 1929 case, there may have been serious international repercussions. What singles out the 2007–8 financial crisis is that its root causes were global in content, even though it first exploded in a tiny corner of the US financial sector. Indeed, it is precisely because of all of the pressures arising out of all of the regressive processes inherent in the newly operational global commodity system had come to be concentrated on a small number of financial instruments created by a small number of financial institutions over a small span of time that explains why the explosive force of the 2007–8 crisis was so immensely powerful.