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Home | Blog | Was Hy Minsky a Blockian?

Was Hy Minsky a Blockian?

March 26, 2014
151165810_6930a33a4f_zHardly, especially given his endorsement of the view that markets are inherently unstable and prone to failure, thus requiring extra-market supervision and control.  But I couldn't help but to think of Walter Block when listening to this part of Duncan Weldon's recent segment about Minsky on BBC 4 (around the 6:00 mark):
Weldon:  [Minsky] sounds like someone not afraid to challenge authority.  I mean, can you see that in his work as well? Laurence Meyer:  Well, yes, because I think he always felt that he was treated like an outsider.  Okay?  He wasn't really part of the mainstream.  And he took great joy in taking on that mainstream for how simplistic their views were and failing to pay attention to something that seems so obvious.
One can't help but to think that part of the reason mainstream central bankers like Meyer and Janet Yellen appreciate Minsky today because Minsky not only missed the role of central banks in causing financial instability, he also endorsed their expanded role in addressing the adverse economic effects of bubbles they themselves helped inflate.  Today, this role takes the form of (faddish) "macroprudential" policies that assume central banks are capable of seeking out and eliminating sector bubbles all while pumping new money into the economy so desired by the political class and the cronies attached to it.  It's not what Minsky got right that makes him relevant to them, but actually what he got so wrong.

Minsky may have had something of a Blockian spirit that we can admire, but such a spirit can prove damaging when backed more by ideology than logical consistency and right reason.

Here's the Google Books version of the Elgar Companion to Hyman Minsky.

Here's Frank Shostak on Minsky from 2007.

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