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The Technological Dynamics of Capitalism: A Note on Antiphysiocracy, Colbertism, and 1848 Moments

In: Physiocracy, Antiphysiocracy and Pfeiffer

Author

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  • Erik S. Reinert

    (Tallinn University of Technology)

Abstract

Economics is a cyclical profession. Its cyclicality appears to follow the same type of mechanisms of “destabilizing stability” as described by US economist Hyman Minsky as leading up to financial crises. When things are stable and improving over long periods of time, bank routines of risk evaluation grow increasingly lax, and in the end credit is given to people who are not even able to pay interest on the loans they are given (“Ponzi financing,” as with subprime loans). Long periods of stability lead to increasing vulnerability, to Minsky’s “destabilizing stability.” This chapter argues that similar mechanisms are at work inside economics: long periods of economic progress in the core countries lead to increasingly abstract and irrelevant economic theories.

Suggested Citation

  • Erik S. Reinert, 2011. "The Technological Dynamics of Capitalism: A Note on Antiphysiocracy, Colbertism, and 1848 Moments," The European Heritage in Economics and the Social Sciences, in: Jürgen Georg Backhaus (ed.), Physiocracy, Antiphysiocracy and Pfeiffer, chapter 0, pages 23-38, Springer.
    • Handle: RePEc:spr:euhchp:978-1-4419-7497-6_3
    DOI: 10.1007/978-1-4419-7497-6_3
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