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14 - The Great Crash of 2007 Viewed through the Perspective of Veblen's Theory of Business Enterprise, Keynes's Monetary Theory of Production and Minsky's Financial Instability Hypothesis

from Part Four - Veblen's Economics

Published online by Cambridge University Press:  05 May 2013

L. Randall Wray
Affiliation:
University of Missouri-Kansas City
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Summary

It has long been recognised that Thorstein Veblen and John Maynard Keynes share a common approach to the nature of ‘business enterprise’ or ‘monetary production' in the modern capitalist economy. While the influence of Keynes on Hyman Minsky's ‘investment theory of the cycle and financial theory of investment’ is obvious and well known, this chapter demonstrates that Veblen's approach is in some ways closer to Minsky's. Further, Veblen's approach is in many important respects more informative, and still relevant for developing an understanding of modern business practice. On the one hand, this is not surprising as Keynes had let many of the monetary details ‘fall into the background'. However, it is surprising that most followers of Keynes have not mined Veblen's 1904 The Theory of Business Enterprise for arguments that nicely complement and extend Keynes's better known approach. This chapter concludes with an assessment of these theories in light of the global financial collapse.

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Chapter
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Thorstein Veblen
Economics for an Age of Crises
, pp. 303 - 316
Publisher: Anthem Press
Print publication year: 2012

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