This article (via Manan Shukla) has a link to an animated video by David Harvey. There have been a number of explanations given for our current economic problems. David Harvey quickly goes through the entire litany of explanations. He believes that there is some truth in each of the explanations. However, he argues that there is an underlying problem in capitalism that is behind most of our financial crises. Capitalism is faced with a need for constant expansion. It relies upon financial innovations to inflate economies when they get into the doldrums. The financial innovations often do what they were intended to do. They inflate the economy, but the innovations often lead to debt crises like those that we have today. We move the crisis from one geography to another.
David Harvey's analysis is drawn from Marx's critique of capitalism. Marx devoted much of his life to the study of capitalism and its contradictions. He was quite good at it. Harvey has a good grasp of Marx's critique of capitalism. He does not, however, have a solution to the problems that are built into capitalism. Somehow it finds ways of getting around its contradictions, and it is ofter painful for many. Moreover, he does not believe that Marx was able to come up with a superior alternative to capitalism. He believed that central planning, and state ownership of the means of production would be a better alternative, but complex economies are not easy to plan, and states have not been better at allocating resources to their most productive uses.
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