Outsourcing, financialisation and the crisis

This article argues that financialisation and outsourcing, neoliberal globalisation's two defining transformations, interact so powerfully that neither can be understood separately from the other. It further argues that the transformations in the sphere of production are primary, and that the global shift of production processes to low-wage countries was driven by the desire of northern TNCs to cut production costs in order to counter the falling rate of profit, resulting in a deepening of capitalism's imperialist and parasitic character. Understanding the relation between financialisation and outsourcing is key to understanding why the global crisis heralded by the 1987 stock market crash did not erupt for another two decades, why this crisis has its roots not in finance but in capitalist production, to understanding the form and dynamics of this crisis, and why it marks the beginning of a protracted global depression that cannot be resolved within capitalism.