Table of Contents

Monetary Economies of Production

Monetary Economies of Production

Banking and Financial Circuits and the Role of the State

Edited by Louis-Philippe Rochon and Mario Seccareccia

The central focus of this book is the relationship between money, the sphere of production, and the State. It explores how best to adapt the fundamental ideas of the circulationist perspective to achieve a better understanding of the financialisation of the production processes within contemporary capitalist economies. Importantly, the expert contributors illustrate that the true challenge ahead is to address how these new emerging forms can be eventually tamed, a challenge that the recent financial crisis has forcefully proven essential.

Chapter 6: Is there room for bulls, bears and States in the circuit?

L. Randall Wray

Subjects: economics and finance, post-keynesian economics

Extract

The title of this chapter is a play on the title of Jan Kregel’s (1986) paper, ‘Shylock and Hamlet, or are there bulls and bears in the circuit?’, which is appropriate as I drafted this in Copenhagen only a few kilometers from ‘Elsinor’ castle. Of additional relevance is that we had just finished the Fifth Post-Keynesian Conference (13–14 May 2011, Roskilde University, Denmark) at which Alain Parguez gave a masterful presentation of the problems with the set-up of the European Union – a topic to which I will turn near the end of this chapter. I will not replicate in detail the arguments made in Kregel’s article. Briefly, his complaint was that the circuit approach is confined to Keynes’s industrial circulation and gives short shrift to the financial circulation. Somewhat ironically, I had moved to Bologna in 1986 – shortly after his paper was published – to write my dissertation on the relation between the two spheres of circulation, attempting a synthesis between a Circuitiste /Neo-Ricardian view of the industrial sphere and a Minskian approach to the financial sphere.

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