Neoliberalism and the global financial crisis of 2008

Abstract

This paper tends to analyze the link between the global financial crisis of 2008 and neoliberalism ideology. This crisis was, in all aspects, a multidimensional global crisis. Initially it began with the crisis of banks, credit and stock exchange, to end up in the economic recession and the disbelief of the free market models adopted in that period. It all started to emerge during 2007 as a financial crisis, which originated from bad loans in the US real estate market. Immediately, the crisis had global impact in Europe and other parts of the world. The great impact and development of such a crisis raised great questions about the ways financial markets and stock exchanges were built and operate, even doubting neoliberal practices, if they were indeed the best model of economic development that countries could adapt. This paper argues this relation, if whether neoliberalism was the main cause of the crisis, taking into consideration the arguments of neoliberals and other specialists in economic and financial field. Through inductive method used in the argument, it is concluded that global crisis of 2008 did not have a single cause, responsible for its birth and deepening, much less that it was the implication of neoliberal ideas in the economic field. It was a series of factors that inevitably led to its birth and deepening. Finally, based on the conclusions drawn, some recommendations are given, which should be implemented to avoid such crises and phenome’s in the future. The paper concludes with an appeal for companies for a higher corporate responsibility in protecting social groups affected by these crises.