Following the financial collapse of 2007-8 Minsky came (back) into economic fashion. The "Minsky moment" and financial instability hypothesis became more or less mainstream. Minsky's work on the financial industry and instability is absolutely essential reading.
Minsky develops his theories of financial instability from a particular interpretation of John Maynard Keynes's The General Theory
The General Theory Of Employment, Interest, And Money
and then Minsky elaborations. Readers of Minsky's "John Maynard Keynes"
John Maynard Keynes
know that Minsky also developed particular policy (e.g. employer of the last resort) and theories of how to better institute greater financial and economic stability. Indeed Minsky wrote about these issues throughout his entire economic career.
This new book is a collection of excellent examples of these efforts, what could be dubbed `Minsky's theoretical policy.' There are seven articles some of which have been published before, dating from 1965 and 1994.
The financial collapse gave to Minsky's work on financial instability a renewed relevance and urgency. Likewise this current "Endless Crisis," (see
The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China
) failed "stimulus" and lack of financial regulation, while in the meantime too-big-fail financial institutions are getting bigger and stronger, are making Minsky's work on `theoretical policy' relevant and urgent. These essays are very insightful for their historical context and read remarkably contemporary given the current historical context of failed fiscal policy and political stalemate.
The working poor, unemployed, and underemployed have been left to fend for themselves. This was Minsky's complaint in the 1970s. Minsky was also radically critical of the "war on poverty" in the midst of Natural Rate of Unemployment target (roughly 8 percent when he was critiquing it as a target).
The reader of these essays will note that there has been no renewed urgency in poverty since Minsky critiqued the poverty program for lacking seriousness nearly 50 years ago. Moreover, inequality has exploded causes structural instability (see chapter 6 of this book for an outline of Minsky's ideas concerning employment, welfare, and stability, (also see
Inequality and Instability: A Study of the World Economy Just Before the Great Crisis
).
What screams out of these essays is that free-market capitalism cannot solve poverty, unemployment, and what today we call underemployment on its own. We need public employment policy and real anti-poverty legislation. This is the aspect that makes these essays the most relevant, persuasive, and urgent.
Randall Wray provides an excellent historical context and introduction to Minksy's `theoretical policy' ideas. Dimitri B. Papadimitriou offers a nice summary of each chapter in the Preface.
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Robert Charleson R. J. Charleson.
Four Stars
Reviewed in the United Kingdom on October 30, 2015