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Financialized capitalism and the irrelevance of self-regulation : a Minskyian analysis of systemic viability

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  • Faruk Ülgen

    (CREG - Centre de recherche en économie de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2)

Abstract

Approaches that support the process of financial liberalization usually assume that free markets can ensure systemic adjustment in case of disequilibria without structural public interventions, and self-regulation mechanisms are more efficient than any collective regulatory mechanism. This article seeks to assess the irrelevance of these critical assumptions with regard to systemic viability in capitalist economies. These assumptions and related (de)regulatory (de)structural reforms implemented in the last decades reveal to be inconsistent with the characteristics of capitalist economies in light of the 2007-08 crisis. In the footsteps of Hyman Minsky, it maintains that financial instability and crises are endogenous phenomena in a capitalist economy and imply tight state intervention. It then argues that financial stability is a public matter and in order to reach societal efficiency and systemic viability, it is necessary to carry out a public organization of markets according to social/collective objectives beyond macroprudential regulatory mechanisms.

Suggested Citation

  • Faruk Ülgen, 2014. "Financialized capitalism and the irrelevance of self-regulation : a Minskyian analysis of systemic viability," Post-Print halshs-01111162, HAL.
    • Handle: RePEc:hal:journl:halshs-01111162
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01111162
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    References listed on IDEAS

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    1. Faruk Ülgen, 2014. "How to Guide the Economy in a Socially Desirable Direction: Lessons from the 2007 Financial Turmoil," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(2), pages 575-584.
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    Keywords

    financialization; financial crisis; liberalization; Minsky; regulation; viability;
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