There are scores of different accounts of the origins of the crisis. The causes are complex, and different experts give different emphasis to them. Many of the elements are mutually reinforcing so it’s often hard to say what came first: but I will at least provide a sketch of the main elements and processes, highlighting the role of the rich.

The crisis was not just a result of the malignant growth of the financial sector alone, but of the interaction between it and the so-called ‘real economy’. So it’s important to begin by clarifying this relationship.

Finance and ‘the real economy’

A capitalist economy needs not only producers of goods and services for sale, but a financial sector. When people talk about ‘the real economy’, they mean the part that produces and distributes goods and services, as opposed to the financial sector. But the terminology is awkward because the financial sector is no less real. Nor is it dispensable; it is absolutely necessary for the production of goods and services for sale. Provided we remember this, we can go along with the usual crude terminology. The trouble is, necessary though the financial sector is, it can also do things that have a devastating effect on the real economy, as we are now discovering. Finance has come to dominate rather than serve the productive sector of the economy. As Ann Pettifor puts it:

Its activities can seem dauntingly obscure and complex, and its technical language bizarre, but it affects the lives of every one of us. We need to open it up to public scrutiny and understand what it does – not only because we depend on it for loans and mortgages and entrust it with banking our pay and savings, but because we are having to bail out failed banks and rescue the system from itself. The sector has failed spectacularly, but ordinary people are picking up the bill.