Fighting Neoliberalism with Keynes & Minsky


Riccardo Bellofiore explains how managerial capitalism of the post-war era entered into a crisis of profitability in the 1970s, and subsequently metamorphized into a new stage, where the role of banks changed, households became net borrowers and businesses net lenders. Bellofiore proposes to revise the insights of Minsky’s financial instability hypothesis, combining it with the Keynesian theory of the monetary circuit, to explain how the source of risk and instability in the modern economy has shifted from firms to traumatized workers and indebted consumers. Under the new circumstances, conventional policy tools are inadequate to stabilize the economy, and governments should consider programs of socialized investment to ensure stability and build up productive capital for the future.

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