DIFFERENCES BETWEEN A NORMAL AND A GREAT CRISIS*( a comparison between the one in 1929 and the current one in 2007)

The crises witnessed by capitalistic economies may be distinguished into two categories, according to the intensity, the duration and the extent of the disasters caused by them. In what concerns the first category, the normal or current crisis, it is referred to the cyclical fluctuations which are an inherent characteristic of capitalism, fluctuations of private initiative determined by the degree of confidence investors have in the future, that determine, in turn, the intensity of economic activity. It is here that we find the undue excitement and over optimism on the part of investors who are willing to undertake extreme risks, because they tend to overrate future returns on their investments. The current crisis we are facing belongs to the category of great ones and is the second one witnessed by mankind in the last eighty years. The artcle also presents several similarities between the current crisis and the 1929 crisis, such as the moral crisis (characterized by extreme individualism, the pursuit of maximum profit and greed), sky-high remunerations of the golden boys- the managers and bosses of the financial sector – then and now, or the shift towards right or extreme right wing parties, in both cases.