Par James K. Galbraith
Senior practitioners of modern economics commonly claim that “nobody could have foreseen” the great financial crisis that began in August, 2007. In fact many economists did foresee it. But their analysis and warnings were ignored. This essay describes five distinct analytical traditions, the followers of each of which contributed emphatic warnings. They are the Marxian tradition, Dean Baker’s chartalist empiricism, Wynne Godley’s balance-sheet Keynesianism, Hyman Minsky’s analysis of financial instability, and John Kenneth Galbraith’s inspection of corporate governance, including the new white collar criminology. None of these traditions are taught in mainstream economics programs. None are represented on the pages of the so-called mainstream journals. This is a grave situation, which can be remedied only by structural reform, disciplinary decentralization, and resource reallocation in higher education.
JEL codes: A23, B2, B31, B41