It did not take long before a crowd of explanations, interpretations, and predictions started wrangling over the story line. The upheaval had been clearly centered in the US financial sector, but as hindsight led further and further backward, the source of the troubles became ever more diffuse and the scale of the problems grew. In the first revisionist narrative, the whole mess became the “subprime mortgage” crisis, as the wrathful finger of blame singled out the untold legions of deadbeat homeowners who were failing to keep up with their house payments, thereby upsetting the banks’ careful calculations. Outrageous stories were circulated detailing the presumptuous and reckless efforts of people with very little income to buy expensive real estate. A moment later it was decided that there must have been something wrong with the federal government’s efforts to help poorer people buy homes, because such people were obviously not ready for the solemn duties of property ownership. That story had to be revised when it emerged that those subprime mortgages had been processed en masse, like factory-farmed cattle, into innocent-looking and highly rated securities which, like fast food hamburgers, could no longer be traced to any particular source. Although the weakness of the mortgages could be estimated, the value of the securities suddenly seemed completely unknowable. It turns out that many kinds of financial transactions work that way, churned out by what is now known as the “shadow banking system,’’ through which a full range of arcane and now rather insecure securities had been bought, sold, and scattered across balance sheets and portfolios large and small. For a short time the complexities of the shadow banking system seemed to offer some kind of key to the perplexing situation, a secret logic or a hidden agenda, although nobody seemed to know how it really worked. Most commentators professed to be shocked and dismayed that things had gotten so far out of hand, although the complaints were usually followed by a grudging admission that the only people who could clean up the mess were the very same people who had created it. Likewise, the ratings agencies and accountants who had been signing off on the dubious valuations were now enlisted to assess the damage and design the rescue. As the troubles continued and the explanations were recycled and refined, it became clear that there was plenty of blame to go around. Sooner or later it would be everybody’s fault, because everybody had been lulled by easy credit and rising markets. And so it was nobody’s fault, since nobody could have seen this coming, and even if they had, any effort to stop it would have violated the core principles upon which the whole system is built.

Just as liquidity problems turned into solvency problems, so a localized crisis of confidence turned into a systemic crisis of knowledge. It unfolded in several stages over the course of 2007 and 2008, reaching its most intense phase in mid-September 2008. According to the theory of efficient markets, uncertainty and risk always go hand in hand, so reluctant buyers should be able to demand a discount, driving down the prices of the more dubious deals. When traders begin to decide that they do not know enough about the securities they are trading, prices are supposed to drop, the issuance of new securities is supposed to slow, and there should be more insurance and hedging all around. Even with a sudden cool-off, the system can sputter along until confidence returns. But when there is enough skepticism stalking the markets, uncertainty cannot find its price. Any asset can become toxic once the market freezes up, not simply losing value but effectively counting for nothing at all. Likewise, a loan can go irretrievably bad anywhere along the line, whether through the failure of the lender, the borrower, or any of the long line of intermediaries between them. The autumn of 2008 brought more than that: the very fact that the financial system had seized up at all proved traumatic. The so-called risk management models, which were advertised as techniques for dealing with imperfect information and providing protection from supposedly less likely scenarios, simply fell apart under the waves of doubt. The best proof that there really is a global capitalist system has been provided not by its successes but by its failures: its markets are most efficient when they are transmitting fear.

As financial institutions of all sizes scrambled to determine their exposure to these abyssal risks, it became clear to everybody that both internal and external oversight of the industry had been disastrously negligent or ignorant or both. Esoteric debates over accounting rules broke into public view because many institutions simply clammed up, refusing to set a value on their losses, to pay out on insured claims, or to take massive write-downs. Banks stopped lending to each other, swindles unraveled, hedge funds vanished, once-mighty behemoths shrank to shadows of their former selves, whereupon they were gobbled up or turned into wards of the state. Hardly anybody objected to the emergency lines of credit and other concessions offered by the Federal Reserve, but the debates sharpened as liquidity injections turned into equity stakes, and federal authorities imposed conditions that were not entirely welcome to those who were being saved from ruin. (Wall Street firms thus replayed a scenario from imperial military history: having “invited” the United States government to intervene, they were shocked to see the troops setting up permanent bases.) If all the big players can be paid off without debauching the currency—an outcome that is still uncertain—the financial system will be handed back to the private sector in fighting shape, although it may henceforth have to operate under new guidelines devised by their once and future colleagues sitting in the administration. Yet it is hard to escape the impression that the debates over re-regulation have been halfhearted: all of the participants were united in their effort to “save capitalism,” and one way or another huge sums of public money found their way into the hands of multinational banks, insurance companies, and individual investors. Despite a full round of confessions and accusations—a duet between mea culpa and I-told-you-so—nobody in the public eye seems to have stopped believing for a second that this thing called capitalism can and should rule the world.

What the various stories and interpretations have in common is the impression that there has been a day of reckoning, a moment of truth, a time when old illusions dropped away and the real state of affairs was at last revealed. Each version positioned the turning point in a different place and drew rather different conclusions. If the troubles had been brewing for just a few months, or a year or so, there would be no need to undertake any fundamental rethinking: it was just a cyclical shift that got out of hand, so perhaps shuffling the leaders in Washington and Wall Street was enough to make sure it does not happen next time. Taking a slightly longer view, the current difficulties could be blamed on the convergence of bad luck, greed, and incompetence that accompanied the reign of George W. Bush, perhaps enabled by the Clinton-era deregulation of banking: now that Bernanke, Summers, Geithner, and the other children of Greenspan have learned from their mistakes, the regulatory regime can be patched up again. But as soon as one begins to trace the problems any further back in history, the major trends of the recent past will begin to seem unsound and a whole epoch will be called into question.

The turning point might be sought about thirty or thirty-five years ago, that is to say, somewhere in the mid to late 1970s, when an Anglo-American blend of neoconservative politics and neoliberal economics gained ascendancy and unbridled capitalist globalization took off. Whatever historical basis there may be for this periodization—and we will examine some evidence shortly—it has the polemical advantage of treating the current crisis as a moment of truth for a whole passage of world history, up until now dominated by the triumph of the market model, the emergence of the US as the sole superpower, and the emergence of China as the biggest new engine of wealth creation and accumulation. Seen in that light, the present conjuncture would be more momentous than that of 1989, which now appears to have merely confirmed global tendencies already under way. (The tanks in Tiananmen Square and the fall of the Berlin Wall would now signify the same process: the implacable advance of market culture, whether enforced at gunpoint or imposed by default.) Likewise the current juncture would have to be considered more decisive than 1968, another monumental date that now seems to be nothing more than the high-water mark of an era that has finally washed away. Indeed, precisely because the past thirty years can be seen as a prolongation of a whole postwar trajectory (and thus a repudiation of its countercultural and antisystemic movements), the present turmoil could be delivering a judgment on the past sixty years or more. Such moments of closure, along with the sense of renewal that follows, are supposed to come only once in a lifetime.

There is one problem with this attractive story: the moment of truth never happened. There has been no transformative revelation, no collective coming-to-our-senses, no realignment with reality, no Vergangenheitsbewältigung for the boomer generation. The passage from unhinged cries of panic to the restoration of confidence has been rather smooth, even while trillions of dollars of paper wealth were disappearing. The crisis of knowledge—as messy, confusing, and embarrassing as it was—did not turn into a crisis of faith. Capitalism could be declared saved from the brink of disaster precisely because its partisans and guardians cried out for a rescue without ever admitting any mortal danger. The media presented the whole ordeal from the Roadrunner’s perspective rather than the Coyote’s: the Roadrunner knows that if you run off a cliff, you won’t plummet as long as you never look down. Nevertheless, there may be some adjustment in the rhetoric from now on. There might even be a new kind of compromise within established opinion: the free market fundamentalists no longer need to claim infallibility in order to get what they want, while the idealists and the skeptics can finally give up on the idea that there is any alternative to the present system. In that sense, this moment may indeed have been a once-in-a-lifetime event, an ideological somersault in place, led by those who want us to believe in capitalism more than ever.

It will not be easy to keep the faith. Both the media-driven panic (short-lived) and the ideological turmoil (quickly calmed) obscure a more fundamental and permanent kind of crisis, one that makes it just as impossible to start over as to carry on as before. We will call this situation a crisis of indebtedness, operating in at least two dimensions. In the first place, the present crisis can be understood as a debt crisis in the classic sense, the piling up of unserviceable obligations, the leveraging of values beyond belief, and a breakdown in the mechanisms that maintain credit and more generally the capital form of value itself. In a broader and more elusive sense, this is a crisis in the social and psychic relations that make economic debts possible: the various forms of economic belonging, selfhood, responsibility, and mobilization that make indebtedness of any kind durable and binding. As different kinds of debts stack up, more than ever people find themselves too much bound to everything that exists. This is not only a problem with everything that exists—the whole world brought to order by a juggernaut system that requires so much energy, time, and space just to keep going—but it is also a problem with the way we bind ourselves to it, and to each other. It is hard to imagine that this more fundamental crisis will be over anytime soon.

It will be necessary to tell the history of the present differently. The readily available narratives have been exhausted and the new ones have not yet projected their horizons very far. In order to get a sense of what stories it might be possible to tell, we should begin with a comparison of several critics of contemporary capitalism who share a common virtue: they understand how the system works without taking for granted that it will survive. At the same time, as opposed to the critics and skeptics who are always predicting disaster, in their work they concentrate precisely on the capacity of the system to profit from its imbalances and to stave off collapse a little longer. Although everybody seems to agree that the financial crisis signaled the end of something, and perhaps even the end of many things at once, it is even more important to examine how and why everything else keeps going.

His interpretation is presented in three parts, each of which demarcates both a phase in a process and a level in a structure. The first moment or level he describes as the “anarchy and competitiveness of capitalist production,” in which each capitalist pursues his or her own interests without regard for the needs of the system. “As long as everything goes well,” Marx wrote, “competition acts … as a practical freemasonry of the capitalist class.”⁵ Evidently this kind of competition, supported in some fashion by the state, provided the updraft during the 1950s and 1960s. But as soon as “chronic overproduction and overcapacity” sets in, competition becomes, in Marx’s words, “a struggle of enemy brothers.”⁶ As profits are squeezed, each competitor must either take a loss and get out, or look for cheaper ways to stay in the game, thereby forcing others to do the same. At this level, one might expect conventional economic theory to declare that all is well: once there has been sufficient exit from the scene, accompanied by the destruction of whatever capital was sunk in the failed enterprises, the survivors stand a chance to regain higher profitability. But the very persistence of the long downturn, with its numerous false dawns and overhyped booms, suggests that there will be no easy path back up.

At the second level, Brenner lays out a different kind of obstacle to the recovery of profits: the fact that investment and exit do not happen continuously and smoothly, but rather in “waves, or blocs, of interrelated placements of fixed capital.”⁷ This jagged pattern characterizes “uneven development” in Brenner’s use of the term: the gaps between “early-developing” and “later-developing” blocs of capital constitute a new axis of competition. Older and newer ensembles of capital, more or less entrenched in different kinds of investment, battle over diminished opportunities to turn a decent profit. Thus, to take one example, the technology bubble of the 1990s grew so huge precisely because it seemed to heral...