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The article provides a reasonable explanation for Exxonmobil's unprecedented expulsion from the Dow Jones Industrial Average on August 31, 2020 based on the Kondratieff Wave Concept and Capital Overaccumulation Theory. Authors of this paper suggest that the crisis in the oil market in 2020, triggered by the coronavirus, was expected and could be explained by the economic origins of development, namely, the change of the 5th technological mode to the 6th one. Taking into account the fact that oil is the main energy source of the 5th technological mode, it is obvious that its change will affect the oil market. At the same time, the process of the oil market losing its positions is not spontaneous, since the intensive development of new technologies and a sharp increase in renewable energy investments have led to a decrease in oil consumption.

Economic crises are inherent in all market systems. The leap from long boom to long downturn is attributed to the lack of advanced capitalist economies to achieve and sustain high profit rates. Economic historians vividly outline overaccumulation and overheating leading to a squeeze of profits as underlying to great booms, recessions and depressions by the historical examples of Italy, France, Germany and Japan. Overaccumulation is based on the capital account being run down due to a demand for labor, which leads to rising wages and capital flight and ultimately to unprofitable economies. Tightening labor markets during long boom phases lead eventually to class conflict, which is the starting point of the profit squeeze and eventually busts and recessions and depressions. Overheating occurs in the wake of strike waves and subsequent wage explosions, such as in Europe between 1968 and 1970 in France, Germany, Netherlands, Italy and the United Kingdom, when workers backed their claims with strike action. Capitalists were forced to concede wage rises, which eventually lowered their rate of profit. Strikes stem out of frustration over moderation of growth of real wages, reduction in labor's share and increase in the share of profits, erosion of differentials, and increased work load. Manifold conventional monetary, fiscal and social intervention strategies as counter-cyclical means to avert booms and busts are described in international examples of the past. This paper aims at adding to the existing literature the case of describing the Austrian Sozialpartnerschaft. This stakeholder engagement means practiced in Austria is shown to avert social imbalances leading to economically inefficient worker uprising, protests and strikes. Since the post-World War II era, the Austrian Wirtschaftswunder (economic miracle) is attributed to the Sozialpartnerschaft breeding economic growth alongside social stability in Austria. The relative low economic fluctuations of the Austrian economy are grounded in the model of Sozialpartnerschaft to solve class struggles and worker rights movements elegantly through self-determination, participation and compromise. The unique Austrian model of the voluntary Sozialpartnerschaft is captured to implicitly curb the falling rate of profit phenomenon. In the Sozialpartnerschaft model, the citizenry, that undermines the profit rate in many other countries, gains access to board meetings to discuss national claims. Rather than partially illegal and counterproductive, risky strike movements, the Sozialpartnerschaft forms an institutionalized relationship between the government, political parties and certain interest groups in the field of labor, social, and economic policy. While it is widely recognized as a key element in Austrian politics since the end of World War II, social partnership is neither anchored in the Austrian constitution nor laid down in any specific legal act. The insights gained from the Austrian way to structure economic growth are discussed alongside granting an international and future perspective of Sozialpartnerschaft as means to avert negative consequences in the wake of economic fluctuations. While the influence of the Sozialpartnerschaft may be decreasing in the eye of the European Union integration and in times of globalization, other countries with fairly less developed stakeholder engagement approaches may learn from the positive example of the Austrian way to gracefully social partner in reaching common economic, industrial and societal endeavors together.

We describe a model in which bank deposits yield liquidity services and therefore earn a lower rate of return than equity. In this sense, deposits are a cheaper source of funding for banks than equity. The banks’ equilibrium capital structure is determined by a trade off between the funding advantages of deposits and the risk of costly default. The cost of default, however, is an illusion associated with the transfer of value in fire sales. This transfer is a private cost for the owners of failed banks but not a deadweight loss for society. As a result, deposits are under-used and banks’ funding costs receive a subsidy from depositors. This subsidy eventually causes banks to grow too large and overaccumulate assets. Policies that force banks to hold higher capital buffers, motivated by a desire to make banks “safer,” will make deposits even cheaper and increase the overaccumulation problem. Increasing leverage, on the other hand, will increase the cost of debt finance and reduce overaccumulation, but may increase the external costs of financial distress, which bankers ignore.

This paper explains the process of financialization and its relation to productive capital accumulation and offshoring/outsourcing. It seeks to answer the question: What role did it play in inducing the current economic crisis and its after-effects in the core and the peripheries? It also discusses the problem of overaccumulation in the global economy, and links it to the ongoing processes of ‘primitive’ accumulation and ‘accumulation by dispossession’. It addresses the probable linkage between overaccumulation and Chinese economy.