by Summary:
Neoclassical economists ignore the instability of capitalism. This is a common belief. Many think capitalism is a stable system. They believe markets naturally find equilibrium. But this is fundamentally wrong. Hyman Minsky showed us that rising debt leads to economic crises. His insights reveal that debt accumulation creates instability. When debt rises, so does risk. The more we borrow, the more vulnerable we become. This isn't just theory; it's history. Look at the Great Depression. Debt levels soared while economic activity plummeted. The result? A catastrophic collapse. So, what should we believe instead? We must abandon equilibrium models. Instead, we need dynamic, far-from-equilibrium approaches. This perspective recognizes the real-world
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Neoclassical economists ignore the instability of capitalism. This is a common belief. Many think capitalism is a stable system. They believe markets naturally find equilibrium. But this is fundamentally wrong. Hyman Minsky showed us that rising debt leads to economic crises. His insights reveal that debt accumulation creates instability. When debt rises, so does risk. The more we borrow, the more vulnerable we become. This isn't just theory; it's history. Look at the Great Depression. Debt levels soared while economic activity plummeted. The result? A catastrophic collapse. So, what should we believe instead? We must abandon equilibrium models. Instead, we need dynamic, far-from-equilibrium approaches. This perspective recognizes the real-world
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| Neoclassical economists ignore the instability of capitalism. This is a common belief. Many think capitalism is a stable system. They believe markets naturally find equilibrium. But this is fundamentally wrong. Hyman Minsky showed us that rising debt leads to economic crises. His insights reveal that debt accumulation creates instability. When debt rises, so does risk. The more we borrow, the more vulnerable we become. This isn't just theory; it's history. Look at the Great Depression. Debt levels soared while economic activity plummeted. The result? A catastrophic collapse. So, what should we believe instead? We must abandon equilibrium models. Instead, we need dynamic, far-from-equilibrium approaches. This perspective recognizes the real-world complexities of capitalism. It acknowledges that economies are not static. They are constantly in flux, influenced by human behavior and external shocks. This is crucial because ignoring these dynamics leads to disastrous policies. For instance, the belief in market self-correction can delay necessary interventions. When crises hit, the fallout is severe. People lose jobs, homes, and livelihoods. The economy doesn't just bounce back. It requires thoughtful, proactive measures to stabilize. By embracing a more realistic view of economics, we can better prepare for future challenges. We can create a system that acknowledges risk and promotes resilience. In doing so, we safeguard not just capitalism, but society itself. The stakes are high. Ignoring instability is no longer an option. It's time for a paradigm shift. |
Absolutely. Imagining that equilibrium is possible (beyond as a short term approximation), let alone desirable flies in the face of the essence of life that an economy fits into. Life continues because it uses non equilibrium benefits (birth, death, evolution) to thrive in an event changing, unpredictable context.
Actually answered my question of what it would look like others. A very natural and relatable perspective. Thank for your insight!
The usual truth in Labelling consequential misinformation by inappropriate measurement problems arising out of deliberate ignorance of Actuality.
Recognition of QM-TIME Calendar Tabulated matrices of condensed elemental e-Pi-i sync-duration function as the orbital-orbit Spheroidal Toroidal dominated structure of Constitutional/Cosmological Logarithmic Time Duration Timing, the Universal picture-plane containment of e-Pi i-reflection Spacetime, this is inside-outside holographic positioning presence in parallel coexistence Principle.
This was understood 3800 years ago. Economics hasn’t done anything intelligent since.