The global financial meltdown and the Great Recession of 2007-2009 have brought into sharp relief the uneven distribution of gain and pain during economic crises. The 2009-2010 debt crisis in Greece resulted in a windfall for financial institutions at the expense of taxpayers, a rollback of welfare systems, and the impoverishment of the working classes. This outcome is consistent with the pattern that has emerged in the international debt crises of the last three decades, including the Latin American crisis during the 1980s and the Asian crisis during the 1990s.
The recurrent international debt crises of the last three decades and the resulting transfers of wealth from the poor to the rich are the products of the neoliberal restructuring of economies that aims to rollback the gains made by the working classes under the Keynesian welfare compromise and to establish the hegemony of finance capital. These neoliberal objectives have been facilitated by an extensive refashioning of the U.S. and international regulatory regimes resulting in financialization of the global economy and unbridled international mobility of finance capital. Global financial institutions channeled excess global liquidity in ways that created unsustainable international debts, which consistently resulted in international debt crises.
These crises were then managed to further advance neoliberal prescriptions for global finance and national economies. The end result of this refashioning of regulatory regime is the transfer of wealth from the poor to the rich, further impoverishment of working classes, and enhanced power of finance capital. A collective moratorium on debt servicing by the Global South is a viable path towards a new global financial order that is sustainable and gives human beings priority over capital.
Tayyab Mahmud, Is it Greek or déjà vu all over again?: Neoliberalism and Winners and Losers of International Debt Crises, 42 LOY. U. CHI. L. REV. 629 (2011).