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The Global Financial Crisis and Educational Restructuring

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Edited By Michael A. Peters, João M. Paraskeva and Tina Besley

The worldwide integration and globalization of finance, an aspect of «financialization», coincided with the rise of market-oriented neoliberalism promoting free trade and privatization strategies. New Internet-based technologies have reinforced financial market integration, creating a fragile, globally integrated financial ecosystem that poses new systemic risks and contagion effects characterized by excessive borrowing and ballooning debt, massive asset bubbles, a huge shadow banking system, and financial innovation leading to collateralized debt obligation and securitization. Public education has been at the core of neoliberal privatization strategies and financialization with the trillion-dollar blowout of student loans. Education, once considered a national and global public good tied to the creation of knowledge and the basis of a just and democratic society, has undergone a profound transformation and financial restructuring. This collection of essays by a range of international experts addresses the root causes of this massive change, analyzing the growth of finance capitalism and financialization, as well as the financialization of education and its consequences. The book is a valuable resource for classes in educational reform, education policy, higher education, and educational finance.

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Chapter One: A Permanent Economic Emergency (Slavoj Žižek)

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c h a p t e r o n e A Permanent Economic Emergency1 slavoj žižek During this year’s protests against the Eurozone’s austerity measures—in Greece and, on a smaller scale, Ireland, Italy and Spain—two stories have imposed them- selves.2 The predominant, establishment story proposes a de-politicized nat- uralization of the crisis: the regulatory measures are presented not as decisions grounded in political choices, but as the imperatives of a neutral financial logic—if we want our economies to stabilize, we simply have to swallow the bitter pill. The other story, that of the protesting workers, students and pensioners, would see the austerity measures as yet another attempt by international financial capital to dismantle the last remainders of the welfare state. The IMF thus appears from one perspective as a neutral agent of discipline and order, and from the other as the oppressive agent of global capital. There is a moment of truth in both perspectives. One cannot miss the super- ego dimension in the way the IMF treats its client states—while scolding and punishing them for unpaid debts, it simultaneously offers them new loans, which everyone knows they will not be able to return, thus drawing them deeper into the vicious cycle of debt generating more debt. On the other hand, the reason this superego strategy works is that the borrowing state, fully aware that it will never really have to repay the full amount of the debt, hopes to profit from it in the...

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