During the South South Forum organized by Lingnan University, I had the opportunity to discuss with Prof. Pedro Paez, who is not only a well-known scholar, but also the former minister of economic policy coordination for the government of Ecuador. The main topic of our discussion was the current financial crisis in Europe and the nature of the measures (so-called austerity measures) taken to avert it. When I raised the question of the current sovereign debt crisis faced by several European countries, Prof. Paez responded without the slightest hesitation that the present crisis goes back twenty years ago. He emphasized that both the present sovereign debt crisis in Europe and the financial meltdown in 2008 were caused by overproduction. His analysis echoes the theory of regime change in capital accumulation first proposed by a group of French economists known as the regulation school. According to this theory, the weakness of the Fordist accumulation of capital was clearly exposed in the crisis of the 1970s. The oil embargo imposed by major oil-producing countries in the Middle East resulted in global recession. As the strategy of the Fordist accumulation hinges on mass production of standardized goods, a steady rise in mass consumption is the pre-requisite for the sustainability of the Fordist accumulation. The global recession caused by the oil embargo put paid to any rise in mass consumption. But the Fordist set-up is such that any disruption to mass production means that the heavy investment in its assembly line will go to waste.
MA, Kwok Ming (2012). A discussion with Prof. Pedro Paez. Cultural Studies@Lingnan, 28. Retrieved from http://commons.ln.edu.hk/mcsln/vol28/iss1/12/