The Great Moderation, the Great Excess and the global housing crisis

Abstract

This paper explores the relationships between local or national housing markets and recent historic transformations in global capitalism. It proposes a periodisation of developments in housing markets, policies and practices distinguishing between, first, the pre-modern period; second, the modern or Fordist period; third, the flexible neoliberal or post-Fordist period; and fourth, the late neoliberal or emerging post-crisis period. This periodisation is a heuristic device that helps to make sense of the interdependence of national housing markets and the global financial crisis. The argument is not that the crisis caused the breakdown of the post-Fordist housing model, but rather that the shift to this model introduced certain dynamics to housing markets that a few decades later culminated into a crisis. The start of the Great Moderation was also the start of the financialisation of states and economies in various domains, particularly housing. In making this argument, I unpack the concept of the Great Moderation: what appeared to be a structural moderation of macroeconomic cycles was in fact the build-up of a bubble economy. The 1970s and early 1980s as well as the post-2007 crisis are critical junctures in the development of housing. The Great Moderation was also a Great Excess in terms of rising inequality and excessive credit and debt, suggestive of a finance-led regime of accumulation.