Just as the 1929 Stock Market Crash discredited Classical economic theory and policy and opened the way for Keynesianism, a consequence of the collapse of confidence in financial markets and the banking system -and the effect that this has had on the global macro economy -is currently discrediting the 'conventional wisdom' of neo-liberalism. This paper argues that at the heart of the crisis is a breakdown in governance that has its roots in the coevolution of political and economic developments and of economic theory and policy since the 1929 Stock Market Crash and the Great Depression that followed. However, while many are looking back to the Great Depression and to the theories and policies that seemed to contribute to recovery during the first part of the twentieth century, we argue that the current context is different from the earlier one; and there are more recent events that may provide better insight into the causes and contributing factors giving rise to the present crisis and to the implications for theory and policy that follow.
Abstract'Global financial crisis' is an inaccurate description of the current upheaval in the world's financial markets. The initial banking crisis did not affect all countries to the same degree. Notably, while the US and UK banking systems were badly hit, those of the other two major Anglo-Saxon economies, Canada and Australia, remain largely unscathed and have even gained in terms of global market share. The national business systems and comparative corporate governance literatures underscore the similarities among these four 'liberal market economies' (LMEs) and would predict similar trajectories. This paper investigates the reasons behind the differing performance of the Anglo-Saxon banking systems, which defy a verdict of failure of the LME variety of capitalism as such.JEL Codes: E32, E44, G38, N10, N20, P17
When the same person is described as a 'Capitalist Revolutionary' and a ‘Bourgeois Marxist’, you know that there is a tug of war going on between opposing ideologies to claim the ideas of that person: in this case, John Maynard Keynes. James Crotty, in his recent book, Keynes against Capitalism, joins the game. Crotty takes issue with the conventional interpretation: that Keynes was trying to save capitalism. Instead, he argues that from the mid-1920s until his death in 1946, Keynes consistently argued for replacing capitalism with ‘liberal socialism’. Crotty also maintains that The General Theory was designed to provide the theoretical foundation in support of his case against capitalism, in favour of liberal socialism. We contend that these labels, however clear they might have been to Keynes, are now laden with all sorts of interpretive baggage, and that Keynes’s thinking was rather too subtle and complex to be comfortably described by them. To make this case, we examine the social purpose that Keynes’s theoretical and policy work was designed to achieve and the means by which he thought it could best be achieved, as his thinking developed in the context of the rapidly changing times through which he lived.
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