Keywordscircuit theory of money
financial instability hypothesis
Karl Marx, Hyman P. Minsky
falling rate of profit
SECS-P/01 - Economia Politica
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AbstractThis issue tries to answer two questions. Is the Marxian theory of crises, in its original formulation, useful to understanding the current crisis? Can the current crisis help us rethink Marx’s theory of crises? The most widespread readings of Marx’s theory of crises are the “tendency toward a fall in the rate of profit” and an underconsumptionist view concerning “realization crises.” These two interpretations have been central in Marxist analyses of the “Great Recession.” In fact, most of the articles included in this issue refer to these lines of thought, and understand financialization accordingly. To set the context of the discussion, a short survey of Marx’s thoughts on the crises is provided, as well as a quick reminder of the central tenets of “financial Keynesianism” (a label that here includes the “circuit theory of money” and the “financial instability hypothesis”). I argue that financialization was a real subsumption of labor to finance coupled with centralization without concentration, which produced a recovery in the rate of profits since the 1980s and turned monetarism into a paradoxical privatized Keynesianism. “Money-manager capitalism” was unsustainable, however. Its collapse opens the door to “socializing investments” and requires policies based on permanent, “good” public deficits.