Costas Lapavitsas is an economist at the School of Oriental and African Studies in London. He has written extensively on Marxist theories of finance. He spoke to Socialist Review and answered questions on historical parallels with the current economic crisis and its impact.
Many mainstream economic commentators are comparing the current economic crisis to the one that hit Japan in the late 1980s, which saw the country stagnate for 15 years. How strong are the similarities?
There are some clear similarities. First, the bubble that is now bursting in the US economy is in property. That was the same in Japan. Much of the speculation that led to the crisis of the late 1980s in Japan was related to housing and commercial property.