Decommodification of financial regulation: some unpleasant lessons from the 2007 crisis

Faruk Ülgen

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Abstract: The Great Transformation of modern capitalism from the 1980s is the commodification of monetary/financial rules and related regulation. Assuming that free markets result in social optimum, financial liberalization has transformed public regulatory mechanisms into private self-regulation systems relying on market price-directed contractual schemas. In light of the 2007-08 crisis, this article seeks to question this blind faith in the market's self-adjustment capacity. It argues that free markets and individual rationality-based economic efficiency cannot result in social harmony. It maintains that financial stability should not be entrusted to the vicissitudes of markets. It then suggests the decommodification of financial supervision through alternative public regulation that seeks social-stability and economic viability.

Keywords: social efficiency; financial regulation; crisis; decommodification; liberalism (search for similar items in EconPapers)
Date: 2015-01-02
New Economics Papers: this item is included in nep-cba and nep-hme
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01111178v1
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Published in ASE at ASSA annual meetings "Commodities, commodification and alternatives to exchange", Association for social economics, Allied social science association, Jan 2015, Boston, United States. 16 p

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01111178

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