Taming the bull: How should society respond to financial crises?

Course content

The aim of this course is to provide an in-depth critical analysis of the challenges posed by systemic crises in globally integrated financial markets to democratic government in Europe and elsewhere, and to evaluate a range of different political responses to financial crises from a normative point of view. The course will combine economic history, political economy and political theory, seeking in particular to understand and assess the near-catastrophic collapse of the 2008 financial crisis, the different kinds of responses frantically mobilized by governments and central banks across the world, and the criteria by which we should judge different political responses to the crisis. Ultimately, the course aims to achieve normative insight into how society should react to the next, crippling financial crisis.

                                                                                                  

The course is structured into three parts. The first part of the course will sketch the history of the global monetary system going back to the interwar gold standard, the rise and fall of Bretton Woods, and the subsequent emergence of a globally integrated financial system, ending with the crash in 2008. The second part of the course will focus on the political economy of the 2008 financial crisis, clarifying the different kinds of more or less successful, short- and long-term attempts by governments to manage the crisis. The third part of the course will rely on normative theories of justice and democracy in order to establish normative criteria (efficiency, justice, transparency, accountability, democratic self-determination) by which to evaluate the actual political responses to the crisis in 2008, and to draw normative conclusions for how society ought to react the next time crisis strikes. The course will consider questions such as: which political responses were most effective in containing the crisis? What were the costs, in a broad sense, of different political reactions, and were those costs acceptable? Were the political responses subject to sufficient democratic legitimation, and were the institutional implications of those responses (such as the rise in the regulative importance of independent central banks or the introduction of a European “fiscal pact”) acceptable from a democratic point of view?

Education

Bachelor student: 10 ECTS

Master student: 7.5 ECTS

Learning outcome

The objective of the course is to enable the students to:

 

Knowledge

  • Attain knowledge of the history of the global monetary system, the 2008 financial crisis and relevant theories of justice and democracy.
  • Understand and explain main divisions and developments in the different interpretations of the 2008 financial crisis and in theories of justice and democracy.

 

Skills

  • Evaluate the validity of the arguments in favor of different government and central bank responses to the crisis.
  • Present and analyze key trends, tensions and contradictions in economic and normative arguments.
  • Write and present in a concise and clear manner.
  • Attain the ability to develop a coherent argument.

                     

Competences

  • Apply the normative theories of justice and democracy to discussions concerning the 2008 financial crisis and the global financial system. 
  • Combine and synthesize accounts of the 2008 financial crisis and normative theories of justice and democracy.
  • Engage in critical reflection on and across different theories and styles of argumentation. 

This course will consist of a combination of lectures, student presentations and discussions, and possibly talks by guest lecturers.

The following is a highly preliminary reading list. Other materials will be added before the beginning of the semester.

 

Blyth, Mark (2013) Austerity. The History of a Dangerous Idea.

Eichengreen, Barry (1996) Globalizing Capital. A History of the International Monetary System

Fraser. Nancy (2010) Scales of Justice. Reimagining Political Space in a Globalizing World.

Fraser, Nancy (2015), “Legitimation Crisis? On the Political Contradictions of Financialized Capitalism”, Critical Historical Studies (Fall 2015)

Habermas, Jürgen (1996) Between Facts and Norms

Habermas, Jürgen (2012) The Crisis of the European Union.

Offe, Claus (2015), Europe Entrapped.

Rawls, John (1999) “The Idea of Public Reason Revisited”

Rawls, John (2001) Justice as Fairness: A Restatement

Rodrik, Dani (2018), “Populism and the Economics of Globalization”.

Streeck, Wolfgang & Armin Schäfer (eds.) (2013) Politics in the Age of Austerity

Streeck, Wolfgang (2014) Buying Time. The Delayed Crisis of Democratic Capitalism

Streeck, Wolfgang (2016) How Will Capitalism End? Essays on a Failing System

Tooze, Adam (2018) Crashed. How a Decade of Financial Crises Changed the World

Wolf, Martin (2015) The Shifts and the Shocks: What We've Learned--and Have Still to Learn--from the Financial Crisis 

Individual
Collective
Feedback by final exam (In addition to the grade)
Peer feedback (Students give each other feedback)
ECTS
7,5 ECTS
Type of assessment
Written assignment
Free assignment
Marking scale
7-point grading scale
Censorship form
No external censorship
Criteria for exam assessment
  • Grade 12 is given for an outstanding performance: the student lives up to the course's goal description in an independent and convincing manner with no or few and minor shortcomings
  • Grade 7 is given for a good performance: the student is confidently able to live up to the goal description, albeit with several shortcomings
  • Grade 02 is given for an adequate performance: the minimum acceptable performance in which the student is only able to live up to the goal description in an insecure and incomplete manner

Single subject courses (day)

  • Category
  • Hours
  • Class Instruction
  • 28
  • English
  • 28