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Introduction

In: Financial Support-Bargaining and the Anatomy of Four Major Crises

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  • Patrick Spread

Abstract

Financial support-bargaining constitutes a crucial dynamic of financial crises. It generates the escalation of asset prices characteristic of crises. Use of the neoclassical model as a frame of reference obscures much that is important in financial crises. Time disparities, manipulation of information, the evolutionary nature of economies and the nature of money as a bargaining counter are all invisible in the neoclassical frame of reference. Time disparities between revenues and expenditures are accommodated through provision of credit. A sharp distinction has developed between the ‘real economy’ and financial markets. Financial markets are vulnerable to manipulation of information since the ‘products’ of financial markets are defined by testimonial information. As part of the management of information, theories are created that function as frames of reference, focusing attention on particular aspects of societies for the advance of interests. Interests are situation related, so that economies evolve from situation to situation. Exchange rates between bargaining counters have to reflect relative purchasing powers in order to provide smooth international money-bargaining linkages. The four crises under investigation are the South Sea Bubble of 1720; the failure of the Mississippi System in 1720; the Great Crash of 1929 on the New York Stock Exchange, and the subsequent Great Depression and the ‘sub-prime’ global financial crisis of 2007–9.

Suggested Citation

  • Patrick Spread, 2025. "Introduction," Springer Books, in: Financial Support-Bargaining and the Anatomy of Four Major Crises, chapter 0, pages 1-14, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-92289-3_1
    DOI: 10.1007/978-3-031-92289-3_1
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