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A Keynesian–Minskian perspective on the transformation of industrial into financial capitalism

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  • Arne Heise

    (University of Hamburg)

Abstract

During the past decades, industrial capitalism has been transformed into something which has been dubbed ‘Casino Capitalism’, ‘Turbo Capitalism’ or ‘Money Manager Capitalism’ by different authors: financial accumulation has outpaced real accumulation. This process of ‘financialisation’ has been discussed quite intensively in the literature with respect to its historical determinants and its macroeconomic effects, yet it has not been studied thoroughly whether the shift from the production and allocation of commodities and services towards the origination and distribution of loans and assets as the main activity of non-financial companies challenges our theoretical principles and, therefore, demands a new macroeconomic approach. The objective of this paper is to argue in a preliminary way that financialisation is not merely to be understood as the relative growth of the financial sector based on a deepening of financial intermediation but as a structural transformation of the core business of non-financial firms. This is based on an extended post-Keynesian theory of monetary production and an application of Minskian short- and long-term instability cycles.

Suggested Citation

  • Arne Heise, 2023. "A Keynesian–Minskian perspective on the transformation of industrial into financial capitalism," Journal of Evolutionary Economics, Springer, vol. 33(4), pages 963-990, September.
    • Handle: RePEc:spr:joevec:v:33:y:2023:i:4:d:10.1007_s00191-023-00840-8
    DOI: 10.1007/s00191-023-00840-8
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    Keywords

    John Maynard Keynes; Hyman P. Minsky; Monetary production economy; Industrial capitalism; Financial capitalism; Financial Instability Hypothesis;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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