What drove the financial crisis? Structuring our historical understanding of a predictable evolutionary disaster

Jacobides, M G (2015) What drove the financial crisis? Structuring our historical understanding of a predictable evolutionary disaster. Business History, 57 (5). pp. 716-735. ISSN 0007-6791

Abstract

This paper revisits the 2008 financial crisis, considering how we can draw on the historical record to reappraise what created the problems and inform theory. It looks in detail at neglected factors such as the nature of the selection environment, the agency of actors, and the influence of structure. On the basis of that evidence, as well as the premise that feedback, rather than foresight, drives behavior, we reach new conclusions on what drove the crisis, and open up an exciting opportunity for historical methods to inform theory. This challenges current policy in terms of the idea of "Too Big To Fail" and the focus of regulation; it also helps us revisit the lessons that we should take from this crisis, taking us away from macro-economic factors and individual malfeasance towards structure. Overall, the analysis suggests that a historical, institutional and evolutionary analysis, based in theory, can add a fresh perspective.