The Economic Legacy of Hyman Minsky, Volume I
Edited by Riccardo Bellofiore and Piero Ferri
7. Minsky’s analysis of ﬁnancial capitalism Dimitri B. Papadimitriou and L. Randall Wray Hyman Minsky used to joke that there are as many varieties of capitalism as Heinz has pickles – 57 (Minsky, 1991). In this contribution, we will be analysing one of them – the general form of postwar capitalism taken in the developed countries, which can be characterized as ﬁnancial capitalism. Obviously, there are differences in the speciﬁc form that ﬁnancial capitalism takes at different times over the postwar period in each of these countries, as well as cross-country differences. However, Minsky’s model is applicable to all of them, at least at a general level. The term ﬁnance capital appears to come from Hilferding’s 1910 book, which proclaimed a new stage of capitalism characterized by complex ﬁnancial relations and domination of industry by ﬁnance (Hilferding, 1981). Importantly, Hilferding argued The most characteristic features of ‘modern’ capitalism are those processes of concentration which, on the one hand, ‘eliminate free competition’ through the formation of cartels and trusts, and on the other, bring bank and industrial capital into an ever more intimate relationship. Through this relationship … capital assumes the form of ﬁnance capital, its supreme and most abstract expression … The progress of industrial concentration has been accompanied by an increasing coalescence between bank and industrial capital. This makes it imperative to undertake a study of the processes of concentration and the direction of their development and particularly their culmination in cartels and trusts. The hopes for the ‘regulation of production’, and...
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