Financial Keynesianism and Market Instability

Financial Keynesianism and Market Instability

The Economic Legacy of Hyman Minsky, Volume I

Edited by Riccardo Bellofiore and Piero Ferri

During his lifetime Hyman Minsky made a seminal contribution to the development of financial Keynesianism. In this book, leading academics celebrate his work and explore his economic legacy. Special attention is paid to his work on contemporary economic method, the Great Depression, the European single currency and the global financial system and recent banking and financial crises – in particular the crisis in Asia. An attempt is made to categorise Minsky’s brand of post Keynesianism and to compare his work with the Keynesian and Marxian traditions.

Chapter 2: Cassandra as optimist

Victoria Chick

Subjects: economics and finance, economic psychology, financial economics and regulation, history of economic thought, post-keynesian economics


Victoria Chick This chapter explores an aspect of Hyman Minsky’s mind and work which I find intriguing: the ability to embrace apparent opposites. We see the same absence of dualistic thinking (see Dow, 1996, pp. 16–18) in Keynes, for example where he portrays money as both protection against an unknown future and a cause of instability, or investment as the outcome of both cold calculation and animal spirits. The apparent contradiction in Minsky’s thought was his recognition of all manner of ‘downside risks’ inherent in advanced capitalism while retaining a belief that the worst effects of capitalism could be forestalled. This is not a review or assessment which aspires to the standards of the history of economic thought, partly because it is impossible in London to have access to the full range of Minsky’s works, partly because others have already written such assessments, comprehensive in scope and of a proper scholarly standard.1 Rather, my viewpoint is partial and personal, in order to explore an interesting apparent paradox. CASSANDRA When I first met Hy, in the late 1950s at Berkeley, only the Cassandra aspect of the role I have given him in my title was clearly visible. In his lectures, whether on money and banking or on Keynes, the message was repeated over and over: there is a threat to the US economy of financial collapse, a repeat of 1929, from which something like the 1930s Depression – ‘It’ – could easily happen again. (‘It’ was such a dire prospect, it seemed,...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information