The late Hyman Minsky described capitalism as an inherently unstable system. The Australian-born economist Steve Keen was a prominent follower of Minsky’s long before the global financial crisis made his unorthodox views fashionable. Thus, we can anticipate the answer to the question posed in the title of Keen’s new book, “Can We Avoid Another Financial Crisis?” A capitalist economy can no better avoid another financial crisis than a dog can avoid picking up fleas – it’s only a matter of time. And, if Keen is correct, we don’t have long to wait before the next blowup arrives.Sponsored Ads
Mainstream economists notoriously failed to anticipate the subprime debacle. It was not for want of smarts. This group got to pick up most of the Nobel Prizes in their field, dominated the dismal-science departments at the most esteemed universities, sat on the editorial boards of the most prestigious journals and, crucially, dictated monetary policy. Keen, by contrast, is an outsider: he is currently head of the economics department at Kingston University. Yet it was Keen who successfully anticipated the last financial crisis at a time when most academic economists around the world were hailing that chimera known as the Great Moderation.