Capitalism, Macroeconomics and Reality

James Crotty, Emeritus Professor of Economics and Sheridan Scholar, Political Economy Research Institute, University of Massachusetts, Amherst, US

This is a marvelous collection of essays of Jim Crotty. They are a joy to read, and provide contributions a plenty for analysing and understanding the evolution of capitalism through globalization and financialization, and developing theories alternative to the mainstream based on realistic assumptions.'--Malcolm Sawyer, University of Leeds, UK'No one has written with greater clarity and insight about economic theory and capitalist dynamics in the past three decades than James Crotty. This collection, assembling his best papers in one place, is a must-have for established and aspirational political economists alike. There is wisdom on every page.'--Gary Dymski, Leeds University Business School, UK'At a time when mainstream economics is being questioned across the world for its lack of relevance and inability to explain observed reality, James Crotty's work comes as a welcome reminder of how economics can be both relevant and insightful. This body of work spanning more than four decades is still fresh and topical, and essential reading for anyone who wants to understand contemporary capitalism.'--Jayati Ghosh, Jawaharlal Nehru University, New Delhi, India

• Contents:Introduction PART I: METHODOLOGY AND THEORY AS IF REALITY MATTERED: FRIEDMAN VS. KEYNES, MARX AND MINSKY1. The Realism of Assumptions Does Matter: Why Keynes-Minsky Theory Must Replace Efficient Market Theory as the Guide to Financial Regulation Policy2. Are Keynesian Uncertainty and Macrotheory Compatible? Conventional Decision Making, Institutional Structures and Conditional Stability in Keynesian Macromodels3. The Centrality of Money, Credit and Financial Intermediation in Marx’s Crisis Theory: An Interpretation of Marx’s Methodology PART II: UNDERSTANDING THE GREAT FINANCIAL CRISIS OF 2007-20084. If Financial Market Competition is Intense, Why are Financial Firm Profits so High?: Reflections on the Current “Golden Age” of Finance 5. Structural Causes of the Global Financial Crisis: A Critical Assessment of the “New Financial Architecture”6. How Bonus-Driven “Rainmaker” Financial Firms Enrich Top Employees, Destroy Shareholder Value and Create Systemic Financial Instability PART III: KEYNES, THE “KEYNESIANS” AND “NEW KEYNESIANS” ON INVESTMENT THEORY7. Is New Keynesian Investment Theory Really “Keynesian”?: Reflections on Fazzari and Variato 8. Owner-Manager Conflict and Financial Theories of Investment Instability: A Critical Assessment of Keynes, Tobin and MinskyPART IV: COMPETITION, GLOBALIZATION, ACCUMULATION AND FINANCIALIZATION IN THE SPIRIT OF MARX, SCHUMPETER AND KEYNES9. Rethinking Marxian Investment Theory: Keynes-Minsky Instability, Competitive Regime Shifts and Coerced Investment 10. Core Industries, Coercive Competition and the Structural Contradictions of Global Neoliberalism 11. The Neoliberal Paradox: The Impact of Destructive Product Market Competition and Modern Financial Markets on Nonfinancial Corporation Performance in the Neoliberal EraPART V: RADICAL THEORY, CLASS CONFLICT AND POLICY IN THE US AND ABROAD12. Was Keynes a Corporatist?: Keynes’s Radical Views on Industrial Policy and Macro Policy in the 1920s 13. Class Conflict and Macropolicy: The Political Business Cycle14. The Great Austerity War in the US: What Caused the US Deficit Crisis and Who Should Pay to Fix It? 15. Was IMF-Imposed Economic Regime Change in South Korea Justified: The Political Economy of the IMFIndex