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| Milton Friedman, the father of neoliberalism. |
i. Introduction.
In this paper I will argue that the financial crisis of 2007- present and the emergence of the shadow banking system, a parallel and unregulated system of banking, are not simply the evil doings of neoliberal deregulation espoused since the 1980s. Before considering the claims that the financial crisis and the shadow banking system are the products of a prevailing neoliberal orthodoxy and that financial crash has been to “Friedmanism what the fall of the Berlin Wall was for authoritarian communism” (Klein 2008), it is necessary to clarify a few keys issues. Firstly, this paper will consider the historical and theoretical underpinnings of neoliberalism as a modern philosophical theory of economics and the market. The paper will then attempt to paint a picture that illustrates how the financial crisis unfolded as well as shedding some light on the nature of shadow banks and the role they played in the crisis of 2007- present. It will then be appropriate to consider the claims that the crisis has sounded the death knell for neoliberalism. Finally we will consider life for neoliberalism post-crisis.
