Part two of John Quiggin’s series of three posts on posts has now been published
Closely related is the question of what, if anything, can and should be done to stabilise the capitalist economy. The orthodox Marxist answer, it seems to me, is the same as that of classical economics, namely “Nothing”. By contrast, I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system. Obviously, those policies broke down in the late 1960s and early 1970s. On the other hand, the limited resort to Keynesian methods in 2008 and 2009 did prevent complete collapse of the system.
As I argued in Zombie Economics, the most promising route forward is to redevelop Keynesian economics in a way that overcomes these failings. That’s not a strategy with a guarantee of success, but it seems more hopeful than any alternative, and certainly better than standing by and restating the obvious fact that crises are part of the system.
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