Why capitalism fails

In de lange reeks kredietcrisis-analyses: Why capitalism fails

  1. 5

    Yeh @KJ, klinkt echt als BRAND, BRAND:

    The Financial Instability Hypothesis (FIH) has both empirical and theoretical aspects that challenge the classic precepts of Smith and Walras, who implied that the economy can be best understood by assuming that it is constantly an equilibrium-seeking and sustaining system. The theoretical argument of the FIH emerges from the characterization of the economy as a capitalist economy with extensive capital assets and a sophisticated financial system.

    In spite of the complexity of financial relations, the key determinant of system behavior remains the level of profits: the FIH incorporates a view in which aggregate demand determines profits. Hence, aggregate profits equal aggregate investment plus the government deficit. The FIH, therefore, considers the impact of debt on system behavior and also includes the manner in which debt is validated.

    Minsky identifies hedge, speculative, and Ponzi finance as distinct income-debt relations for economic units. He asserts that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system: conversely, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a “deviation-amplifying” system. Thus, the FIH suggests that over periods of prolonged prosperity, capitalist economies tend to move from a financial structure dominated by hedge finance (stable) to a structure that increasingly emphasizes speculative and Ponzi finance (unstable). The FIH is a model of a capitalist economy that does not rely on exogenous shocks to generate business cycles of varying severity: business cycles of history are compounded out of (i) the internal dynamics of capitalist economies, and (ii) the system of interventions and regulations that are designed to keep the economy operating within reasonable bounds.

    Oh, en Nick, heb je ook nog inhoudelijk commentaar of ben je nu out-of-president-Wiki?

  2. 6

    Ik had het meer over dit stukje:

    From the 1960s onward, Minsky elaborated on this hypothesis. At the time he believed that this shift was already underway: postwar stability, financial innovation, and the receding memory of the Great Depression were gradually setting the stage for a crisis of epic proportions.

    Die dus niet kwam. En dit:

    “This wasn’t a Minsky moment,” explains Randall Wray. “It was a Minsky half-century.”

    Dat betekent dat de voorspelling een ferme crisis, waarvan we er toch echt wel iedere eeuw een gehad hebben, een halve eeuw op zich heeft laten wachten. Zo kan ik het ook.

  3. 7

    Zo kan ik het ook.

    Natuurlijk kun jij het zo ook. Dus wat let je om je eigen blog te beginnen? Zien we over veertig jaar wel of je gelijk hebt.

  4. 9

    Het concept dat kapitalisme een inherent instabiel systeem is dateert natuurlijk al van Marx (goede analist, zeker als je hem in zijn tijd plaatst, slechte probleemoplosser.)