In chapter 26 of The Globalization Reader, Ashok Bardhan looks to explain the global financial crisis “The Crash”. Bardhan’s argument for the crash in the financial sector globally is over-financialization and globalization. When we discuss financialization we are talking about financial capital overriding what we see as the traditional industrial economy as well as the agricultural economy. As Bardhan puts it “the rise in the size of financial assets relative to the real economy as indicated by gross domestic product.” (203) The financial sector and its assets are instrumental to our capitalistic economy but when they become too inflated they will harm that very same economy. Now Bardhan also argues that globalization had just as big of a part in the the crisis as over-financialization did. One the contributing factors to the overly inflated financial sector was that globalization led to new trade volumes, which increased due to the diversion from consumption by domestic consumers to that of foreign ones.
What i find so fascinating about this argument is the use of the relationship between the US and China. The US has this insatiable appetite and the country hungers for consumerism. China being the manufacturing machine that it is provided the necessary products to fill such a appetite and in turn the US fueled the financial sector of China. The relationship is not one that can solely be attributed to US, it is one that has become a global phenomenon. This global consumerism led to more and more high risk investments and was ultimately the cause of global financial crisis. Our capitalistic society has become a model for the world, one which creates opportunities for monetary gains and the power that comes with. The only question left to ask, is will it be our downfall?