Reclaimed by the Mainstream? Hyman Minsky and the Global Credit Crunch

Hyman Minsky had long been an outsider of mainstream finance and economics. A pessimistic theorist of financial capitalism, he did not fit into the increasingly technical, equilibrium-centred currents of economics. His timing as an institutionalist of Keynesian tradition was wrong too: the monetarism-dominated 1970s and the 1980s were not a friendly time for a post-Keynesian scholar. In this instance, it seems rather odd that an outcome of the continuing crisis has been to rehabilitate the name of Minsky — long an outsider of mainstream finance and economics — in the emergent analyses of the crisis. Commentators speak about a ‘Minsky moment’ in the financial system, repeat his wise observation that ‘stability is always destabilising’ and even note the element of Ponzi pyramids in the recent bout of securitisation. But which part of Minsky’s vision of financial instability and economic reform do today’s policymakers pick? And what precisely does a ‘Minskyan’ reading of finance suggest about the current state of the world financial markets?