Why the global economy is stuck in endless crisis — and nobody profits from fixing it

Prologue: The feeling of déjà vu

• 2008: Banking collapse, bailouts, “never again.”
• 2020: Pandemic shock, money printing, “different this time.”
• 2023: Silicon Valley Bank crashes, panic again, rescue again.

And every time the same script: panic → print money → “all clear” → assets soar → the rich get richer → rinse and repeat in five to ten years.

The question isn’t why this happens. The question is why doesn’t anyone stop this insane carousel?

The answer will surprise you: because crisis has become the most profitable business on the planet.

HOW THE SYSTEM IS SUPPOSED TO WORK (and why it broke)

Economics as a TV series with a predictable plot

Italian sociologist Giovanni Arrighi spent his entire life dissecting how global capitalism actually works. And he found something amazing: for the last 700 years, the system worked like clockwork. More precisely, like a TV series with four seasons, each following the same script.

Act One: Someone invents a new form of capitalism. Genoa — banking. Holland — joint-stock companies. Britain — industrial factories. America — transnational corporations.

Act Two: This country becomes rich, very rich. Money flows like a river, palaces and factories are built, new technologies are invented.

Act Three: But success breeds imitators. Everyone starts copying. Competition grows. Profits fall. Nowhere left to invest money.

Act Four: Then capital moves into finance. Bankers replace industrialists. Speculation replaces production. Inequality grows. Culture flourishes (because the rich don’t know what to do with their money except buy art).

Finale: A great war. Everything burns. From the rubble, a new leader is born. And a new season begins.

This worked four times. Genoa → Holland → Britain → America. Each cycle shorter than the previous:

• Genoa: 290 years
• Holland: 220 years
• Britain: 190 years
• America: should have ended somewhere around 2000–2020…

But it didn’t end. We’re still here. And that’s the problem.

THE JAPAN WE LOST

The one who was supposed to be chosen

In the 1980s, everything pointed to Japan. Seriously, everything.

They made the best cars, electronics, semiconductors. They were buying up Hollywood and Rockefeller Center. Their banks controlled 40% of global financial assets. The Japanese invented keiretsu — a new form of capitalism where banks, factories, and trading houses work as a single organism.

By historical logic, the fifth cycle should have begun. The Japanese one. The yen should have replaced the dollar. Tokyo should have replaced New York.

You know what happened instead?

Murder by appointment

1985, Plaza Hotel in New York. Finance ministers of the five richest countries gather for a “friendly meeting.” Result: Japan is forced to strengthen the yen by 50% in two years.

Imagine: you’re selling a product for $100, and suddenly officials agree that now your product costs $200. Just like that. Because they decided so.

Japanese exports become uncompetitive. Companies panic. To survive, they start inflating a financial bubble — playing the stock market and real estate. In 1989, the Imperial Palace in Tokyo is worth more than all of California’s real estate.

1990 — the bubble bursts. Nikkei falls from 39,000 to 15,000. And never recovers.

The “lost decades” begin. Japan is still there. The economy doesn’t grow. Youth doesn’t have children. People work themselves to death in offices (karoshi — literally “death from overwork”).

The fifth season didn’t happen. The directors (read: USA) canceled it.

THE PENALTY LOOP: When the system freezes

Stuck on the last episode

Imagine a TV series frozen on the season four finale. The characters are ready to die or be reborn, but instead they keep rolling back a few episodes. And so on for 45 years straight.

That’s what’s happening to capitalism since the 1980s.

Normally, the financial phase should last 50–80 years, then — boom, big war, reboot. But we’ve been in this phase for 45 years, and nothing changes.

Moreover, the system has learned not to change. Every crisis that should have been a catharsis turns into an episode after which everything returns to square one. Only worse.

Normal cycle scheme:

Growth → Crisis → Collapse → Cleansing → New leader → Growth

Penalty loop scheme:

Growth → Mini-crisis → Print money → Artificial growth → Bigger crisis → Print even more → New loop at a higher level of absurdity

It’s like the economy’s drug addiction. Each time you need a bigger dose to get the same high.

Numbers don’t lie

How much money we print for “rescue”:

• 2000 (dot-com): $200 billion
• 2008 (finance): $3.6 trillion
• 2020 (COVID): $4.7 trillion in MONTHS

Each dose is 10–20 times larger than the previous. Classic symptom of addiction.

Time between crises:

• 1987 → 2000: 13 years
• 2000 → 2008: 8 years
• 2008 → 2020: 12 years (but 2018–19 already shaking)
• 2020 → 2023: 3 years

Intervals are shrinking. System is losing stability.

Where does the money go: 90% of new money settles in financial assets — stocks, real estate, cryptocurrencies. That is, in the pockets of those who are already rich.

Average American salary (adjusted for inflation):

• 1973: $54,000
• 2023: $56,000

Growth in 50 years — 3.7%. While productivity grew by 250%.

Where did the rest go? Look at the billionaire charts.

CRISIS AS A BUSINESS MODEL

Wall Street’s biggest secret

And now the main revelation. The one that explains why nobody wants to stop this carousel.

Crisis has become a commodity.

When a teacher loses her job during a recession — it’s a tragedy for her. When a factory closes — it’s a catastrophe for the town. But for Goldman Sachs or BlackRock, it’s the best quarter of the year.

How does it work?

Anatomy of profit from catastrophe

Step 1: Preparation Big banks see the crisis ahead. They often create it — issuing loans to those who can’t repay, or inflating bubbles. But instead of stopping, they prepare instruments to profit from the crash.

Derivatives. Short sales. Default insurance. These are all ways to make money when prices fall.

Step 2: Collapse The bubble bursts. Panic. People lose jobs, houses, savings. But for big players — it’s harvest time. They profit from the fall, then buy up cheap assets.

Step 3: “Rescue” The government prints money for “stabilization.” Officially — to help the economy. In reality, 90% goes to big banks. People’s capitalism for the masses, socialism for the elite.

Step 4: New growth Assets soar because only big players have money. They buy everything — from real estate to startups. Concentration grows. The system becomes less competitive.

Step 5: Repeat in 5–10 years

Real example: 2008

• Before crisis: Banks issue mortgages to everyone, package them into complex derivatives, sell them worldwide.
• Crisis: People can’t pay. Collapse. Lehman Brothers bankrupt.
• “Rescue”: $700 billion taxpayer money goes to banks.
• Result for banks: Goldman Sachs in Q4 2008 — record $2.3 billion profit on trading.
• Result for people: 10 million lost their homes. Middle class still hasn’t recovered.

This is not a bug. It’s a feature.

WHY THE SYSTEM CAN’T RENEW

Three obstacles that didn’t exist in history

Okay, you’ll say, but why doesn’t a new leader just come? China, for example?

The problem is that the rules of the game have changed. Three factors have appeared that didn’t exist in the previous 700 years.

1. Nuclear weapons: War on pause

All previous transitions were accompanied by great wars:

• Genoa → Holland: Thirty Years’ War (8 million victims)
• Holland → Britain: Napoleonic Wars (3–6 million)
• Britain → USA: Two World Wars (100+ million)

War was the “cleansing” mechanism: old institutions were destroyed, debts written off, resources redistributed. Horrible, but it worked.

Now we have nuclear weapons. World War III = end of civilization. So the mechanism broke.

Conflicts exist (Ukraine, Middle East), but they’re local. They don’t change the global order. The system is stuck in semi-crisis without catharsis.

2. The planet ran out

All previous cycles were based on expansion. Genoa financed the discovery of America. Britain conquered 40% of the world. America mastered two oceans.

Today the planet is divided. There’s nowhere left to expand. Moreover — we’ve already crossed ecological boundaries:

• Climate: +1.2°C, heading to +2–3°C (catastrophe)
• Oceans: acidifying, fish stocks collapsing
• Biodiversity: sixth great extinction
• Water: deficit for 40% of world population

Capitalism always worked on growth. But how to grow on a planet that’s already full?

3. Artificial Intelligence: Capitalism without workers?

Capitalism worked for 700 years on a simple formula:

• Capitalists own factories
• Workers sell labor
• Workers buy goods
• Profit

But what happens when robots replace people? Who will buy the goods? How to distribute wealth if labor is no longer needed?

ChatGPT, Midjourney, autonomous cars — this is just the beginning. In 10–20 years, 40–60% of jobs are at risk. The system isn’t ready.

CONSEQUENCES FOR ORDINARY PEOPLE

When “temporary” becomes permanent

The worst thing about the penalty loop — it normalizes crisis.

Education: US student debt — $1.7 trillion. People pay for 20–30 years. This is no longer investment, it’s debt bondage.

Housing: Investment funds are buying up houses. 40% of deals in some cities — corporations, not families. Rent soars. Owning a home becomes a dream, not a norm.

Work: “Gig economy” — a beautiful name for lack of guarantees. Uber, Fiverr, DoorDash — you’re not an employee, you’re an “independent contractor.” Without sick leave, vacation, pension.

Pensions: Pension funds invest in the stock market. When the market falls — your old age is at risk. Risk transferred to you.

Health: Medical debt — over $200 billion in the US. People declare bankruptcy due to illness.

Everything that used to be basic rights has become financial products. And each crisis hits you again.

Psychological crisis of a generation

There’s this thing — “millennial pessimism.” People born after 1980 don’t believe in the future.

Data:

• 67% of young Americans: “The economy is unfair”
• 52% of youth positive about “socialism” (whatever they understand by it)
• Birth rates have fallen historically
• Marriages later or never
• “Lying flat” in China, NEET in Japan, “quiet quitting” in the West

These aren’t lazy snowflakes. This is a rational reaction to a system where:

• You work more than your parents but live worse
• A house is inaccessible without inheritance
• Education = debt, not a ticket up
• Every 10 years everything resets

When the system doesn’t promise progress, why play?

WHAT’S NEXT: Five scenarios for the future

Scenario 1: Japanification of the world (50% probability)

Everything continues as is. Low rates. Slow growth 1–2%. Crisis every 5–10 years. Central banks print money forever. Inequality grows. Youth leaves or gives up.

Maybe we’re already there. This isn’t apocalypse. It’s worse — endless autumn without winter or spring.

Duration: 20–30 years, until debt load becomes absolutely toxic.

Scenario 2: Breaking the blockade — fifth cycle (20%)

Unexpected technological breakthrough (fusion energy? AI revolution?) or geopolitical shock creates conditions for a new cycle.

China or someone else finds a new organizational form of capitalism that solves current problems.

But: No signs of this now.

Scenario 3: Controlled disintegration (25%)

The world splits into blocks: USA, China, EU, Russia+. Each with its own currency, standards, technologies. Deglobalization.

Benefit: More autonomy. Risk: Blocks compete by exporting crisis to each other. May escalate.

Scenario 4: System collapse (5%)

Low probability but catastrophic consequences:

• Financial panic that can’t be stopped
• Climate catastrophe
• Pandemic with 10%+ lethality
• Limited nuclear war

Result: Collapse of global chains, return to local economies, possibly “dark ages 2.0”.

Scenario 5: Post-capitalist transformation (5%)

Least realistic but most hopeful:

• Automation → Universal Basic Income
• From GDP to well-being as metric
• Circular economy
• Democratization of capital (cooperatives, DAOs)

Problem: Requires massive political will and overcoming elite resistance. Not visible yet.

WHAT TO DO: Survival guide in the penalty loop

For individuals:

1. Understanding = power If you’ve read this far — you already have an advantage. Most people don’t understand that crisis is not a bug but a business model. Understanding allows preparation.

2. Diversification

• Not just stocks (they correlate in crises)
• Real assets: land, gold, skills
• Geographic: not all eggs in one basket
• Social: mutual aid networks

3. Skills > Diploma Education is expensive and quickly outdated. Invest in skills hard to automate: critical thinking, creativity, empathy.

4. Local networks When global systems fail, communities survive. Know your neighbors. Support local businesses. Create mutual aid.

For citizens:

1. Political education Most politicians either don’t understand the system or pretend not to. Pressure those who understand. Support structural reforms, not cosmetic ones.

2. Financial regulation Return of Glass-Steagall Act (separation of investment and commercial banks). Financial transaction tax. Ban on “too big to fail”.

3. Rethinking goals From GDP to happiness index, well-being, sustainability. Economy is a means, not an end.

For countries:

1. Currency sovereignty Dependence on the dollar = dependence on American crises. Regional currencies, central bank digital currencies.

2. Strategic autonomy Food security. Energy independence. Technological sovereignty. Globalization worked while it worked. Now — risk.

3. Social resilience Countries with strong social networks (Scandinavia) weather crises easier. Investments in education, health, social protection — not expenses but insurance.

Epilogue: We live at a bifurcation point

There’s this concept in chaos theory — bifurcation point. A moment when a system becomes so unstable that even a small push can send it into a completely different state.

We’re there now.

The penalty loop can’t last forever. Something has to break — for better or worse. History shows that such moments determine trajectory for centuries ahead.

Past generations had no choice. They didn’t understand the system’s logic. Wars erupted unexpectedly. Crises seemed like natural disasters.

We’re different. We have knowledge. We understand mechanisms. We see that crisis is not a natural catastrophe but an artificial product.

And this gives us something previous generations didn’t have — the ability to consciously choose the future.

The question isn’t whether the system will break. The question is what it will transform into. And who will decide — us, or those profiting from it.

The clock is ticking. The penalty loop accelerates. And the only thing worse than rapid change — is its absence.

P.S. If you read all this and think: “But economists and politicians know this, why aren’t they doing anything?” — remember Upton Sinclair’s words:

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

They understand. Their salary just comes from the other side of the barricades.

Material based on analysis of Giovanni Arrighi’s “The Long Twentieth Century” and current economic data. All facts verified, conclusions are the author’s. Oleh Cheslavskyi — independent historian and analyst specializing in deconstructing imperial narratives.

Originally published at spilno.org