Marx, Keynes and Minsky on the Instability of the Capitalist Growth Process and the Nature of Government Economic Policy

In his essay in this volume, Hyman Minsky is hunting big game. As he tells us in his opening paragraph, he is attempting to explain the recurrent crises in the domestic economy and in the international financial system, as well as the failure of economic policy either to prevent the outbreak of these crises or to eliminate them in reasonably short order. He also presents a sharp critique of received economic theory as a reliable guide to policy. Toward the end of the paper, Minsky suggests some fundamentally new directions for government policy, and he calls for the radical restructuring of economic policy institutions. In the spirit of this occasion, Minsky draws heavily on the work of John Maynard Keynes, both in his analysis of the current economic crisis and of the inadequacy of policy and in his suggestions for institutional change. In keeping with this same spirit I will draw upon the ideas of Keynes and Marx in addressing the major issues and questions posed by Minsky. In this essay I will compare and contrast theories of cyclical and long-term instability associated with the Marxian tradition and with the work of Keynes and Minsky. I will assess the explanations of the ongoing economic crises of the current era offered by Minsky and by Marxist writers. I will also discuss the different perspectives that the Keynesian and Marxian traditions bring to the analysis of the economic role o