Accordingly, such argumentation, based, of course, on Marxian concepts, provides the terms to rethink contemporary neoliberal form of capitalism and modern crisis as expressions of the contradictions inherent in this organization of capital hegemony, and contemporary form of imperialism, as well. Our analysis also comes up with some conclusions concerning the discussions within Marxism on whether derivatives are commodities or money (or even some other representation of capitalist wealth) and how should we comprehend the global crisis of 2008 in the light Marxian argumentation.

The underconsuptionist approach, which was dominant among Marxists in the 1890s was fiercly criticized by the Russian “legal Marxist” Tugan-Baranowsky (T-B) on the basis of Marx’s reproduction schemes in Vol. II of Capital. T-B's theoretical intervention created a new “orthodoxy” among Marxists during the first decades of the 20th century. However, he incorporated in his analysis the “absolute immiseration thesis,” and claimed that “proportionality” between production sectors would exclude any possibility of crisis, despite the supposedly continuous fall in mass consumption. This approach allows for a Keynesian interpretation of Marx’s theory of expanded reproduction of social capital, according to which a constantly increasing investment demand may always compensate for the lacking demand for consumer goods.

The notion of capital overaccumulation is considered in this paper as the key element of Marx’s crisis theory. The paper concludes that economic crises shall be identified neither with the law of the tendential fall in the profit rate, nor with some supposedly intrinsic underconsuption of the labouring classes. Instead, crises shall be comprehended as the outcome of the fusion of a variety of factors which suppress the rate of profit. An economic crisis can be described, therefore, as a conjunctural overaccumulation, i.e. a conjunctural production of commodities (means of production and means of consumption) in such quantities and prices, that they temporarily hinder the process of capital expanded reproduction. In the last instance, all categories of factors affecting the value composition of capital and the profit rate are overdetermined by classstruggle, the main object of which is the (level of) exploitation of the labour force.

The Connections in Political Economy website is based on the idea of the 'concept map', providing a visual depiction of the links that might be followed from one topic of research and area of literature to another. It consists of a set of hyperlinked pages assigned to particular topics and issues. Each page contains annotated 'reading lists' and links to a variety of sources of information of varying degrees of depth of analysis. These range from seminal texts to contemporary media comment and debate. The “connections project” is necessarily an ongoing venture which will benefit from the widest collaboration.

The purpose of this paper is to demonstrate the use of this website to explore the connections in the political economy literature which are relevant to the Global Financial Crisis. The crisis has had enormous distributional implications, including the increased need felt by particular groups to defend their relative positions and to attach blame to other parties. The believed certainties, optimism and apparent cooperation of the so-called ‘Great Moderation’ leading up to the crisis, at least within the developed world, have now been replaced by widespread realisation of the fundamental uncertainties of the market, together with a need to attach blame. Such rivalries can be seen between groups within national economies, between nations (eg within Europe) and between groups of nations.

The issues raised by the crisis are wide and varied. Some are related to particular institutional developments that have only recent historical specificity, such as the fallout from the US sub-prime crisis, its implications via collateralisation and the particular details of the bank bailouts. Other analyses have focused on developments which have a longer timeframe. These include the growth of financialisation since the 1980s, the instabilities arising from the particular role of the US dollar, and the related emergence of global imbalances since the turn of the century. Alongside these developments, significant ideological changes have taken place within mainstream academic economics over the last 30 years, which have been seen to provide an underpinning for unrealistic claims about market efficiency. The influence of market fundamentalism, and the exclusion of heterodox ideas and the history of economic thought from academic curricula, have been acknowledged to have contributed to the crisis.

The crisis has indicated the relevance of fundamental concepts which transcend the details of the current historical events. These include the roles played by rent extraction, political patronage and capture, mercantilism, and the fundamental uncertainties associated with ‘free’, unregulated markets, to name just a few. Such ‘timeless’ concepts have their origins in other periods of economic and social upheaval and in the writings of the ‘worldly philosophers’ of earlier times.

Biggest firms thought never to go to banktrupcy, had been gone to banktrupchy as a result of deregulations. By widening the effects of the global crisis, it had been witnessed increasing effective role of government, especially in the developped countries as USA, England and other countries of Europe. The intervention of governments realized to prevent loss of ‘trust’ due to high fragility of finance sector.

On the other side, another important improvement had been realizing by increasing mergers. These mergers had been played an important role as a saver for the firms with weak financial situation. But another important role of that kind of mergers is to cause increasing power of oligarchy. Monolopolized world giants had been creating by that way.

The new tranformed world seems to be faced with wilder capitalism.

• Micocci, A. (2008a), The Metaphysics of Capitalism, Lexington, Lanham
• Micocci, A. (2008b), “The Transformation Problem?”, International Journal of Applied Economics and Econometrics, no.2.

In order to qualify for EMU membership, Bulgaria has to meet the convergence criteria, as outlined in the Maastricht treaty. The Maastricht criteria refer to nominal convergence, that is the adjustment of nominal variables to threshold levels set by the Maastricht treaty. As a consequence the convergence criteria are predominantly stability-oriented. Their purpose is to ensure macroeconomic stability, which is reflected in low inflation and low interest rates, fiscal discipline and a stable currency. The Maastricht criteria do not require ‘real’ convergence of the new member states’ economies before they join EMU, although it is generally expected that acceptable levels of real economic growth should be achieved in order that the new member states are able to survive increased competition within the EU and the euro zone.

Bulgaria’s adoption of the currency board has helped the country achieve macroeconomic stability and has facilitated the road towards European integration. It has been shown that countries with hard pegged exchange rate regimes exhibit stronger nominal convergence and they are in a better position to satisfy the Maastricht criteria than countries with floating exchange rates (Kutan and Yigit, 2005). Bulgaria’s commitment to sustaining the currency board and adopting the euro has required fiscal contraction, which the country has been hoping to guarantee its smooth and fast EMU accession. Indeed Bulgaria has been able to meet most of the Maastricht criteria, that is the criteria for a stable currency, low interest rates and fiscal discipline. The criterion for low inflation has been a more difficult one to achieve, not just for Bulgaria but also for other Central and Eastern European Countries (CEECs) which are currently on the road to adopting the euro. Many writers have discussed the contradictions between nominal and real convergence and the fact that the real ‘catching up’ of the CEE economies will unavoidably create inflationary pressures due to Balassa-Samuelson effects (De Grauwe and Schnabl, 2005; Szapary, 2001). Recently though, the decrease in aggregate demand due to the global recession has forced prices down and inflation in Bulgaria fell to 2.8% in average for 2009. As a result, the country was being optimistic about applying to enter the ERM II at the end of January 2010. Countries must stay within ERM II mechanism for at least two years before they adopt the common currency. Bulgaria was therefore hoping to adopt the euro by 2013.

However the global economic crisis has revealed the vulnerabilities of individual countries, both members (such as Greece) and non-members (such as Bulgaria). Bulgaria is at the moment the poorest member of the EU, with GDP per capita levels (based on PPP) at about 30% of the eurozone. Moreover it is burdened by a large current account deficit which could put at stake the currency board regime and macroeconomic stability, especially in the event of capital inflow ‘stops’ due to the global recession, which in turn could lead in a currency crisis (Rostowski, 2003). Moreover the fall of GDP in 2009 (-5%) which is expected to continue in 2010 will put pressure upon the fiscal discipline achieved in the previous periods.

The global economic crisis has also accentuated the contradictions inherent in the requirements in order for the candidate countries to qualify for EMU membership. Over-emphasis on nominal convergence criteria may halter real economic growth and delay real convergence, which is especially important for transition countries. It may also motivate countries to resort to various techniques in order to technically meet the criteria during the examination period (e.g. reducing indirect taxation to force down inflation), only to loosen up their policies once they join the EMU. The paper’s objective is to reflect on EMU accession issues in Bulgaria, with a special focus on recent developments of the global economic crisis. Both successes and challenges of the Bulgarian economy in the light of EMU accession are analyzed, in a discussion about Bulgaria’s prospects to enter the eurozone. Although Bulgaria has shown signs of nominal convergence and was therefore hopeful about adopting the euro by 2013, this goal has now become more distant because of issues the global economic crisis brought up. In particular the crisis has revealed the vulnerabilities of individual countries, as well as the possible inefficiencies of the nominal convergence criteria.

Afterwards, a bitter dispute has broken out between these two wings on which theoretical model best explained the Great Recession. This paper argues that neither wing has an adequate explanation because both theoretical models are: obsessed with the actions or motivations of individual economic agents; refuse to provide empirical evidence from history (thus have models lacking in any predictive power); and focus only on flaws in the financial sector for the causes rather than the wider capitalist production process.

These failings also apply to a greater or lesser degree to many heterodox economic explanations, ranging from the behavioural or ‘animal spirits’ versions of the Keynesian model, the Minsky ‘financial instability’ supporters, to the Austrian ‘excessive credit’ school.

This paper argues that the Marxist model of capitalism best explains the Great Recession, rooted as it is in the inherent flaws in the capitalist production process and then its indirect impact on the financial sector. This reveals how the proximate causes are related to the ultimate.

The methodological lessons for economists from the Great Recession are: 1) turn to the aggregate and away from the individual in forming economic theory; 2) provide empirical evidence that can be tested and retested; and 3) look at the big picture, not one sector of the capitalist economy.