Marx and Minsky on crisis

JUAN EDUARDO SANTARCANGELO Y GUILLERMO MAYA MUÑOZ

DF

Congreso; The Seventh Forum of the World Association for Political Economy; 2012

World Association for Political Economy

The current financial crisis is the worst crisis that the world has experienced since theGreat Depression of 1930s. The bursting of the housing bubble in the United States,which began in 2007 and quickly spread to most of the developed countries of theworld, has led to the collapse of significant financial institutions and more importantly,to a major restructuring of financial corporations operating in the stock markets ofUnited States, England and Germany. The result is the well known process ofconcentration and centralization of capital. Due to the extension of the crisis, differenteconomists and social scientists from all over the world have been working to provide acoherent explanation on the causes of the financial crisis and its possible solutions.However, despite the wide arrow of theoretical perspectives, the common groundamong them is that the works of Hyman Minsky and Karl Marx have been used as acentral source in the more important and interesting explanations provided. In thiscontext, the main objective of this paper is to analyze the notions and explanationsgiven by Hyman Minsky and Karl Marx regarding the causes behind the recurring criseson national economies and the international financial system and the failure thateconomic policy exhibits either to prevent the outbreak of the crisis or to remove someof its most negative effects in the short term.