The Socialization of Investment, from Keynes to Minsky and Beyond

An understanding of, and an intervention into, the present capitalist reality requires that we put together the insights of Karl Marx on labor, as well as those of Hyman Minsky on finance. The best way to do this is within a longer-term perspective, looking at the different stages through which capitalism evolves. In other words, what is needed is a Schumpeterian-like, nonmechanical view about long waves, where Minsky's financial Keynesianism is integrated with Marx's focus on capitalist relations of production. Both are essential elements in understanding neoliberalism's ascent and collapse. Minsky provided crucial elements in understanding the capitalist "new economy." This refers to his perceptive diagnosis of "money manager capitalism," the new form of capitalism that came from the womb of the Keynesian era itself. It collapsed a first time with the dot-com crisis, and a second time, and more seriously, with the subprime crisis. The focus is on the long-term changes in capitalism, and especially on what L. Randall Wray appropriately calls Minsky's "stages approach." Our aim is to show that this theme has a deep connection with the topic of the socialization of investment, central in the conclusions of the latter's 1975 book on Keynes.