In order to avert future financial crises, the Austrian and post-Keynesian schools posit contrasting monetary solutions for governments to consider. Yet, this paper contends, both paradigms are predicated on the fanciful notion that a steady-state capitalism can exist. The Marxian financialisation school, conversely, recognizes the systemic propensity to crisis and, further maintains that the recent survival of capitalism can be attributed to the decline of real wages and excessive levels of (unsustainable) debt. Yet, all three approaches ignore Marx?s own (objective) claim that the profit rate has a secular tendency to fall that, in turn, impacts investment and (indirectly) creates pre-conditions for financial sector instability. Through the illustration of a steam train, this paper seeks to demonstrate these monetary dynamics and suggests that a restoration of the profit rate is imperative for the sustainability of capitalism (as defined). But, this usually comes with a high price. What is good for capitalism is not usually good for people and planet.
|Title of host publication||Annual Heterodox Economics Association Conference, Paris, France, July 2012|
|Publication status||Published - 2012|