Destabilizing competition and institutional stabilizersThe contribution of J.M. Keynes

Orthodox economics rests on the belief that if markets were fully competitive, there would be general efficiency. The current financial malfunctions, accordingly, would not result from free competition, but rather from insufficient competition. This statement is strong, for it rests on a sophisticated conceptual framework within which there is no dysfunction when perfect competition prevails. But it is also strongly unrealistic, for it rejects public interventions even when markets obviously lost there bearings in the storm. In fact much of those who referred to the orthodox approach before the financial crisis, are now, inconsistently, claiming for public interventions. This short paper argues that there is a consistent way of thinking about necessary public interventions. Indeed, John Maynard Keynes focus on fundamental uncertainty consequences questioned the supposed virtues of competition and offered the most elaborated alternative as for thinking about the current turnmoils and designing the necessary stabilizers.