(COVID) CRISIS IN A FINANCIALIZED ECONOMY AND ALTERNATIVE REGULATION

Drawing upon the 2007-2008global crisis and the current Covid pandemic, this article aims to show thatsince the 1980s, the organization of the economy in a liberal way transformedpublic financial regulation into market-relying self-regulation that led topersistent crises. The article maintains that the financialized accumulationregime generates endogenous inconsistencies and proves to be unable to ensuresystemic stability and long-term viability of society. An alternative financialregulation resting on preventive collective action seems to be a relevant wayto provide society with a sustainable and progressive financial system.The ill-management of the Covid crisis isrelated to the socio-economic framework that rules societies and economiesaround the world since the 1980s. The evolution of capitalism rests onspeculation-led accumulation process that deepens inequalities and putscollective projects and goals on the back burner. This evolution, also known asfinancialization, is based first and foremost on the primacy of short-termprofitability. Relying on individual (micro) rationality, it is unable toconduct market activities from a macroeconomic perspective to ensure thedevelopment of society. Although individual market strategies can be regardedas rational actions, the systemic financial stability cannot be achieved bymarket mechanisms. In a capitalist economy, financialstability is to the viability of society what public health isto the lives of citizens. Both require the oversight of a visible public hand. Drawing upon institutionaleconomics this article then shows that systemic dysfunction of capitalistfinance does reflect the dysfunctional organization of society in whichcollective action has been abandoned in favor of the doctrine of efficient,self-regulating markets. Recurrent crises, caused by the imbalances generatedby laissez-faire economics, are the main threats to the sustainability of anopen, innovative and progressive society. From this perspective, the regulationof financial systems is of paramount importance and calls for alternativemodels of collective action that should determine the conditions of exercise ofprivate financial institutions according to the goals of a sustainable economyrespectful of both people and the environment beyond the conservativeindividualistic doctrines.