Credit, indebtedness and economic growth | RussEurope
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Credit, indebtedness and economic growth
1 septembre 2013
Par Jacques Sapir
A tale of two (capitalist) regimes
The issue of credit, and of bank activity, has been on the forefront of economic debates since the beginning of the current crisis. Notions like “bubbles” or Ponzi-credit had become commonplace[1]. Nevertheless quite frequently fundamentals of a modern capitalist economy have been forgotten. This leads to some misunderstanding about credit, debt and the logics of the economy. Credit can be the best or the worse. It heavily depends of financial institutions and of the general macroeconomic framework of a given economy. It is of the utmost importance to understand that “good” institutions with “wrong” macroeconomic framework is to create a situation where credit can easily lead to serious problems as well as a situation characterized by “wrong” institutions and “good” macroeconomic framework. This is emphasizing both the central role assumed by credit in a modern capitalist economy but also role changes with evolutions of the economy.
Actually the place of credit strongly changed not just between pre-capitalist and capitalist economies but also with different regimes of the capitalist economy. We will first describe the general role of credit (and debt) in a capitalist economy and will show that there is no difference between what is called a “modern” capitalist economy and a credit-based economy. We are then to tell the story of two regimes, the one actually dominant in the 1960’s by looking at financial aspects of French development and the one who led us into the 2008 crisis. We will then make some inference for Russia of the comparison between these two regimes.