Neo-liberalism And The International Financial Crisis

Since the1980’s, Neo-liberalism continuatively expanded in the global spread, andgradually evolved into a system of contemporary capitalism, a new stage ofdevelopment of the contemporary capitalist system. In the Neo-liberalism phase ofcapitalism, the world’s most prominent problem is international financial crisis. Afterthe crisis detonated by USA whose market economy system is the most mature, whosefinancial system is the most completed, the storm of the crisis is rapidly sweeping theglobe. In-depth study of the inherent links of Neo-liberalism and the internationalfinancial crisis, is an urgent need for the present era and contemporary China.Neo-liberalism in the process spreading to the global expansion, not only bred andcatalytic financial crisis of the developing countries of Latin America, the Soviet Unionand Eastern Europe, Asia, and growing economic imbalances between developedcountries and inside developed countries, so as to the international financial crisis hassowed the seeds. Dominated by the Neo-liberalism, financial liberalization has greatlypromoted the financial and virtualization process of the capitalist economy: theindependence of the financial sector is increasing; the size of the expansion is increasing;the movement of financial capital is more and more away from the real economy, thevirtualization of the capitalist economy has reached unprecedented proportions. Thehuge amount of speculative capital in order to maximize profits in the rapid globalmobility, pose a huge threat to global market stability. Great freedom of capital willinevitably lead to the great crisis of the world. In the United States, the new regime ofNeo-liberalism and the "American Dream" is actually connected one. The subprimemortgage crisis triggered by the subprime mortgage bubble burst quickly evolved into acomprehensive financial crisis and economic crisis, is rapidly spreading alongNeo-liberalism system to other developed and developing countries from the UnitedStates, and eventually evolved into the international financial crisis. The international financial crisis showed the distinctive characteristics of theNeo-liberalism era: traditional crisis manifests itself in inadequate consumption, whilethis crisis was presented as the excessive consumption; the traditional performance ofcrisis is overproduction, this crisis was presented for financial over-performance;traditional crisis first broke out in the real economy and performance of an economiccrisis, this crisis first broke out in the field of virtual economy and performance of thefinancial crisis. Neo-liberalism originated in the U.S. financial crisis quickly evolvedinto an international financial crisis sweeping the globe, a true sense of the global crisis.Neo-liberalism led of speculation prevailed, the rapid expansion of financial capital,and formation of a huge speculative bubble; Neo-liberalism of exacerbated thepolarization, the people of the growing impoverishment, thus promoting the formationof living beyond the liabilities of consumption patterns of huge debt bubble; thedominant Neo-liberalism financial liberalization, financial supervision continue to relax,leading to of proliferation of financial derivatives, forming of huge virtual economybubble, a speculative bubble, debt bubble and virtual economic bubble promote eachother, and constantly vicious expansion and eventually detonated of internationalfinancial crisis.In western developed countries, there isn’t a thorough understanding of theoutbreak of the crisis, which is the inevitable result of Neo-liberalism, and thus theirresponse to the crisis policies and initiatives must continue to follow the logic of capital,so they are bound to go into trouble. With the deepening of the crisis, the profoundimpact of crisis gradually revealed, which will inevitably lead to profound changes inglobal economic order and political landscape, especially with the socialization ofeconomic and financial crisis, hegemony and power politics of the developed capitalistcountries will intensify in global scale.For China, the key to successfully cope with the international financial crisis is tolearn the wisdom from the crisis,“the truth of Marxism textbooks”, is its own affairswell. The struggle of two views on reform should be highly concerned, adhere to thesocialist orientation of market economy, against the reform of the neo-liberalismorientation; co-ordinate domestic and foreign situations, keep a low profile, the principle involved in the establishment of new international economic and politicalorder; it is necessary to see of capital in the development of productive forces, thetremendous energy of the industrialization, and actively guide of capital of vigorouslydevelopment of real economy, and to see of capital of the nature of fame and fortuneand the inherent crisis tendencies, and resolutely regulation of capital off the real tovirtual speculation money, to realize the coordinated development of the real economyand virtual economy; adhere to people-centered socialism with Chinese characteristicstheoretical system, against the purpose-oriented Neo-liberalism. The Party not only cannot withdraw from the financial sector, but also should strengthen the party’s leadershipon financial affairs.