NEO-LIBERALISM - A STRUCTURAL SOURCE OF THE CRISIS AND THE SEARCH FOR REMEDIAL MEASURES

The real causes of the crisis are outside the errors made by bankers or the greed of financiers. Its true source should be attributed to structural changes that took place during recent decades in the world economy, and especially in the US. These changes are rooted in the basic alteration of the line of thought in economic policies by the Western countries. Since late 1970. this line was dominated by the neo-liberal ideology. The author critically assesses theoretical foundations of economic policies carried out in the framework of neo-liberal doctrine and analyses their main outcomes: increase of inequalities as well as the excessive financialization of economies. The latter depended on the explosive growth of financial markets and their departure from the real economy. The thesis formulated by the author is: the problem of the contemporary crisis cannot be solved unless its structural causes, fuelled by the neo-liberal ideology, are addressed. In the first place the inequalities in income distribution should be reduced (return to the progressive taxation systems should help in this case), and secondly, the financial markets should be subjected to stricter regulations that would stabilize financial system. The return to the ideas similar to these that supported the Glass-Steagall Act would be helpful in this area.