At issue here was not whether the amount of debt taken on was sound in some metaphysical sense, but rather the entirely practical fact that actors need to generate sufficient cash flow from their investments to be able to service their debts.  Osborne, The Politics of Time: Modernity and Avant-Garde, Verso, 1999; Robin, The Reactionary Mind: Conservatism from Edmund Burke to Sarah Palin, Oxford University Press, 2013. At the same time, what in policymaking circles was once considered a source of moral hazard — the creation of expectations of financial assistance — was increasingly treated as a legitimate policy instrument. At the same time, he was not averse to adopting that mindset, hopeful as he was that his insights into the limitations of classical political economy could be translated into an economic policy manual for the modern age. Bailouts may appear as incoherent, last-ditch external interventions, but, as we have seen, their role in our economic life corresponds to a definite logic. (M. Volcker’s policy turn had taken the “muddling through” option off the table, and decisions were now required. By this logic, going to college is an investment in one’s own future self, meant to result in skills that will generate returns in the future and allow for the repayment of the debt incurred to build them. In the new era of financial instability, this had given way to keen awareness that the failure to act might work as a self-fulfilling prophecy, producing the very downward spiral of asset prices that is feared. Ideally, of course, those skills will also appreciate in value. ¤
The post-Keynesian critique is rooted in a distinction between a real economy, dedicated to the creation of real value through productive investment, and a fictitious sphere of speculative finance, driven by the spirit of gambling and a fetishistic belief that pushing money around can beget more money. Of course, Volcker would not have been able to predict the specific features of that regime; but the very point of the neoliberal turn in financial management was to create a context where risk could be socialized in ways that were more selective and therefore non-inflationary. It is not that anyone has ever lost sight of the morally troubling aspects of too big to fail.  Foucault’s reflections on the nature of neoliberalism can be found in The Birth of Biopolitics, New York: Palgrave, 2008 . ¤
Martijn Konings works in the Department of Political Economy at the University of Sydney. Nowhere has this logic become more visible than in the realities of debt-financed liberal arts education.  One issue here is the tendency to reduce the thrust of Minsky’s work to evocative titles like “The Financial Instability Hypothesis: An Interpretation of Keynes and an Alternative to ‘Standard’ Theory” (Challenge, March–April, 1977, pp. It was also emblematic of the broader social compromise of the age: a means to ensure the funds of ordinary people that simultaneously worked to reduce banks’ exposure to the possibility of a sudden liquidity crisis. Rather, bailouts manifest the paradoxical combination of forward-looking and reactionary sentiments at the heart of neoliberalism’s rationality: it is intensely concerned with the opportunities and threats of an uncertain future, but when volatility threatens to tip over into the wholesale failure of capitalism, dire necessity demands that any ambitions for exploration and experimentation be subordinated to the need to prevent a slide down into the abyss. In turn, many otherwise sensible people have become very aggravated by the focus on neoliberalism, concerned that it is tantamount to conspiracy theorizing, or that it leads to crude epochal demarcations. Instead, he viewed the tapestry of debt and credit as the very stuff of capitalist life. 
For Minsky, economic actors or households were essentially balance sheet entities, raising cash by extending promises and using it to make investments. Morgan could only have dreamed of. This kind of generic critique, which claims to be as relevant for the early 20th century as for the present day, is unable to account for how the place of finance has structurally changed. At such times, there is something naturally compelling about the idea that there “must” be an objective limit beyond which the growth of speculative credit is no longer sustainable.  Piketty, Capital in the Twenty- First Century, Harvard University Press, 2014; Summers, “The Age of Secular Stagnation: What It Is and What to Do About It,” Foreign Affairs, March–April, 2016. This is especially apparent with respect to student debt: growing numbers are locked into a life of debt servicing even when it is perfectly obvious that there is no realistic chance that they will ever pay off their debt. Some find themselves under intense pressure to maintain payments on small amounts of debt at pain of foreclosure, whereas others can count on endless forbearance. This provides a useful lens through which to view Minsky’s contributions. Deposit insurance addressed the problem in a preventative way and at a deeper level than after-the-fact last-resort lending. The structure of the capitalist economy is a temporal one — not just in the trivial sense that things take place in time and are therefore subject to change, but in the more profound sense that time is an active force and that it therefore makes no sense to analyze processes of change as if they are driving toward a neutral state where things are organized according to their true value or purpose. In particular, it fails to recognize that the signal strength of the neoliberal project has been the ability to fold the dead weight of its own past into the generative logic of speculation and so position it as yet another occasion for its expansion. But the promise that human capital could participate in the logic of capital gains and asset inflation has always remained a rather deceptive one. The apparent impossibility of putting such moments to politically productive use indicates the need to connect to and appropriate our past in a way that does not take capital as its measure — a project that promises few direct policy solutions but may nonetheless be capable of providing us with currently unimagined ways of seeing, feeling, and thinking. This is really the principal limitation of post-Keynesianism, one that it shares with more mainstream appropriations of Keynes’s legacy: it does not know how to think of capital’s speculative concern with the future as something that is truly productive, as generating a future that is just not already given or determined. Orthodox economics thinks in terms of objective risk or uncertainty that can be statistically quantified. For him, the key factor at work was the creation of deposit insurance, which removed the rationale behind bank runs. During the next decade, the American state came to the rescue of a number of financial institutions that were too big to fail. As a style of critique, Keynesianism — whether mainstreamed or “post” — is defined by the fear that the future might not resemble the past it imagines. This point about the meaning of “animal spirits” is made by Ute Tellmann, “Historical Ontologies of Uncertainty and Money: Rethinking the Current Critique of Finance,” Journal of Cultural Economy, 2016, 9(1), p. Far more frustrating than the resilience of orthodox economic thinking is the obsessive concern of more critical minds to prove mainstream economics “wrong,” in the most literal way possible. That should certainly trouble us, but to develop discontent into a moral critique means that we treat them as exceptional events, beyond the frame of rational explanation, as somehow breaking out of the way we have constructed the institutions of economic life. As a result, it cannot handle situations where we do not have such probabilistic knowledge about the future, where we are genuinely in the dark about where things are going. Shackle stressed that uncertainty, ignorance, and the need to speculate are pervasive — not exceptional occurrences that troubled an otherwise rational or neutral way of organizing the economy, but the very stuff of economic life. Such moments are seen as underscoring the dangers of overindebtedness, and Minsky’s work on financial instability was taken as a theoretical explanation for why certain levels of debt are unsustainable. Of course, the fact that past predictions turned out to be incorrect can always be taken as indicating the need to improve our ability to predict the future.  G. For critics like Keen, the critique of financial speculation becomes its own kind of positive science that aspires to a direct input on policy. 139. In this respect, he belonged to a tradition of pragmatic thinking about the nature of central banking that includes thinkers such as Henry Thornton, Walter Bagehot, and Ralph George Hawtrey — all of whom had been closely involved with the practical operation of the financial markets of their day. After the crash and the depression that followed, the US financial system experienced a long period of relative stability. In fact, scholarly and public commentary on the growth of financial markets over the past decades is littered with predictions of an impending crisis that have turned out to be incorrect. This is what Minsky referred to as a payment or liquidity constraint: whatever our long-term plans, they need to include some provisions to make it to tomorrow. 156. Minsky,” p. For Keynes, the “meantime” mattered because, as he famously quipped, “we are all dead in the long run.” Minsky did not have much use for the idea of such an independently given long run: in the economic game of capitalism, some survive and others die, some thrive and others languish. 20–27) or Can “It” Happen Again? Post-Keynesians typically formulate Keynes’s key contribution through the lens of risk and uncertainty. Long before the current fascination with post-truth, neoliberal policy embraced the idea that the concern with fundamental values was of little practical use. But these have typically been handled within the logic of neoliberal capitalism itself. Although banks could no longer invest the deposits that the public had entrusted them with in the stock market, they had plenty of other opportunities for investing in assets that defied any traditional definition of soundness (opportunities provided by the rapid expansion of consumer and mortgage credit during this era). Never do we have more certainty about the need to maintain capitalism’s key institutions than at times when the banks seem about to fail and we face genuine uncertainty. Government of the Precarious, Verso, 2015. There is of course a definite banality about the bailouts, but the “banality of bailouts” should have been fertile ground for critical thinking, rather than an occasion for moralistic lament. We should exercise some caution here: in the immediate aftermath of the crisis, it was hard to find people who didn’t claim to have been the only ones to predict the calamity. It is seen to violate the basic principles of market discipline, and can be exploited by large financial institutions that are “too big to fail.”
Bagehot tried to address the perception of an unfair advantage by instructing central banks to restrict their lending to sound collateral, assets whose long-term value was not in question — that way, so was the idea, the intervention would be effectively neutral.  But this never offered much of a solution in cases where banks only had assets of unknown or poor quality. The lender-of-last-resort function is only effective insofar as it provides liquidity in exchange for bank assets at minimum prices. But this, perhaps above all, reflected the abiding influence of the conservative orientation of the Keynesian imaginary. In the early 20th century, it had been the anxiety about sound fundamentals that, in the spirit of the Bagehot doctrine, had prevented the Federal Reserve from acting more decisively. In this way, it established a regime of too-big-to-fail expectations: institutions that are vital to the operation of the system can expect to be bailed out if they get themselves into trouble. The result is a life that is constantly drained of liquidity, robbed of possibilities for making new investments and changing course. The book attacks debt, or the societal scourge of overindebtedness, arguing that high levels of debt must always lead to financial instability and crisis.  One important contribution along such lines is Isabel Lorey, State of Insecurity. His new book, Capital and Time: For a New Critique of Neoliberal Reason, will be published in January by Stanford University Press. The post-Keynesian critique has become specifically focused on the role of speculation, investment that is driven by irrational sentiment and unrealistic expectation rather than by accurate assessment of underlying values. They were keenly aware that the central bank does not stand apart from the financial system but, being itself a bank, always remains deeply embroiled with the risk logic of the financial system. This rejection of speculation as unproductive activity can be found in Keynes. Could the futility of attempts to beat mainstream economics at its own scientistic game be any more apparent than at present?  A term recovered from Minsky’s doctoral thesis by Mehrling, “The Vision of Hyman P. 72.  The centrality of the Volcker shock in the making of neoliberal, financialized capitalism is one of the key arguments in Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire, Verso, 2013. But in doing so, they can trigger a fall in asset prices that makes the situation worse for everyone and only adds to the pressure on banks’ balance sheets. This was one of the reasons why the Federal Reserve let the financial system go into free-fall with the crash of 1929: banks appeared to be fundamentally insolvent rather than merely temporarily illiquid — even though, if plenty of liquidity had been provided upfront, the insolvency might never have manifested. The constant downward risk-shifting that is the flipside of bailouts has resulted in what Eric Cazdyn has referred to as the “new chronic.”  One of the distinctive aspects of neoliberal economic insecurity is that the option of bankruptcy is more and more difficult to access. But even though the post-Keynesian claim to have its roots in Keynes’s own analysis is plausible enough, the engagement with his work is nonetheless rather literal and one-sided. One motivation for this approach is strategic: trying to beat mainstream economists at their own game means speaking to an existing audience. P. DECEMBER 28, 2017
THE GLOBAL FINANCIAL CRISIS has done next to nothing to change the convictions of mainstream economists. E. Shackle, Epistemics and Economics. As much as he was concerned with the possibility of fluctuations in the way investors valued things, Keynes still held on to the idea of a long-run market outcome against which short-run valuation shifts could be judged — as if there exists some neutral notion of what the “whole life” of something consists in, a time of life that was simply naturally given, rather than shaped by the dynamics of capitalism. It is not just that it is no longer a ticket to a middle-class lifestyle. But this is largely besides the point: neither Volcker nor his associates had much faith in monetarism as an economic theory, and he was fully aware that it was only an expedient way to engineer and justify the kind of monetary contraction that he considered necessary. 
If there is — to use Michel Foucault’s expression — a distinctively neoliberal rationality, this has little to do with the literal content of Milton Friedman’s monetarist theories and much more with a particular orientation to the uses of risk and uncertainty.  Neoliberalism is characterized by an intuitive comfort with the prospect and reality of crisis, a sort of existential confidence that instability will kindle energies and provoke something better than what we have now. Life becomes a series of moments of bare survival, forced participation in a game of which the outcome has been preempted by the existence of a debt to the past that can never be discharged. The across-the-board tightening of liquidity constraints led to a dramatic expansion of the shadow financial system, and chronic inflation gave way to financial crisis. The Federal Reserve realized that this needed to be kept in check if the new system was to last, but it was unable to impose appropriate constraints on the banks, which found it all too easy to resort to methods of money and credit creation that were not covered by the post–New Deal institutional framework — what we would now call “shadow banking.” These dynamics were not covered by the protections of deposit insurance. The logic of credit and debt cannot be seen as something that takes place while more fundamental processes work themselves out. But in the General Theory it in fact refers to “a spontaneous urge to action” that escapes calculation and is necessary even if only to initiate productive investment.  By this logic, the willingness to work with uncertainty is not a pathological feature of the capitalist mindset, but part of a distinctly modern concern to shape an open future. Minsky understood that liquidity constraints were not distributed equally or democratically. Recent years have seen a dramatic growth of interest in the idea of neoliberalism as a way to understand the nature of our times. Here Keen draws his inspiration most directly from Hyman Minsky, whose work achieved some fame during the 2007–’08 crisis, when the term “Minsky moment” was widely used (including in such establishment outlets as The Economist, The Financial Times, and The Wall Street Journal) to refer to a financial “tipping point” — the moment when the amount of debt becomes unsustainable and the wobbly edifice of speculative fictions begins to fall apart. Claims to know the true, timeless nature of value seem somewhat laughable in a context where capital is proving itself capable of squeezing value out of even the most mundane, seemingly innocuous aspects of everyday life. As Peter Osborne and Corey Robin each have argued, conservatism is never really as conservative as its progressive opponents imagine: it is rarely simply minded to quietly maintain a status quo and far more often seeks to aggressively recapture what it thinks of as stolen privileges.  And if there is always something “revolutionary” about conservative movements, this is especially true of neoliberalism, which fuses this political impulse with the speculative ethos of capitalist economics. Public institutions had no way of knowing or relating to the true value of things, and all methods for influencing the trajectory of the financial system involve the short-term manipulation of liquidity constraints. For instance, Keynes’s comment on the role of “animal spirits” in economic life is often referred to in a context that emphasizes the irrational character of financial market psychology. Indeed, the bulk of human capital — that is to say, the skills and capacities that working people have to offer — has been subject to constant devaluation, which means that large segments of the population are faced with a version of the “underwater mortgage” phenomenon: they need to maintain payments on a debt that is larger than the asset it purchased. S. Critics of financialization like Keen understand it on the “what-goes-up-must-come-down” model — that is, as the irrational growth of speculative debt that defies economic gravity. This governmental rationality is really what has permitted the sustained “financialization” of American life. Attempts to predict the future are impotent in the face of capital’s powers of speculation. Minsky,” Journal of Economic Behavior & Organization, 1999, 39 (2). Such a liberation of shadow banking was the point of the neoliberal turn in US financial policy, initiated by Paul Volcker in 1979. 158. On this logic, the main role of the central bank was to contain the effects of crises that had always been such a marked feature of the capitalist banking system. After all, it has been the preferred mode of engagement for decades. Nor is a standard post-Keynesian interpretation of Minsky likely to survive a close reading of his Stabilizing an Unstable Economy, McGraw Hill, 2008 . Even for those with a permanent job that is interesting and pays reasonably well, there is only one uninsured event standing between a normal life and a world of compounding trouble.
The human capital-model of labor has never been able to provide a meaningful route to economic security. When banks are faced with a drain on their deposits, they sell off their investments in a bid to maintain liquidity. This policy principle has always been viewed with considerable suspicion. ¤
The extent to which economic issues intersect here not simply with politics, but also with deeper questions of a philosophical nature makes the constant tendency to revert to formulaic critiques of overindebtedness and fictitious capital that much more aggravating. In that sense, there really only is the meantime — all time was borrowed. 161. Minsky’s work probably also has two faces, and there is enough textual evidence for Keen’s version of Minsky. Keen’s post-Keynesianism accordingly has rather more in common with the mainstream Keynesianism of people like Thomas Piketty and Larry Summers than we might be led to believe. The openness of the future that Hayekians so readily embrace, and that capital so eagerly exploits, inspires above all anxiety in Keynesians, who seek refuge in imagined foundations and mythical pasts to justify their steadfast refusal to experiment and to take speculation back from capital. This has led to a sense of permanent crisis among large segments of the population. A more contextualized assessment of the development of Minsky’s work is presented by Perry Mehrling, “The Vision of Hyman P. The unregulated expansion of financial dynamics was a development full of promise: banking was not to be tamed but to be liberated. But of course this strategy rarely leads to the imagined traction. The idea that we can invest all our resources in the future and patiently wait for an eventual payoff is perhaps something that can only be entertained by a wealthy rentier like Keynes, precisely because he never really had to worry about his own liquidity. Piketty and Summers have in recent years presented the most influential diagnoses of our economic predicament, the former connecting wealth inequalities to capitalism’s declining capacity to generate real growth and the latter’s rehabilitation of the theory of “secular stagnation” (first proposed by Alvin Hansen, the most prominent American Keynesian in Keynes’s own time) similarly suggesting that the logic of capitalism may just have run out of steam.  Each theory in its own way argues that present-day economies are characterized by too much accumulated capital in relation to the limited potential offered by the future; and each sees both the amount of money circulating in the financial sphere and the constant creation of artificial credit bubbles as derivative of this prior problem.  Cazdyn, The Already Dead: The New Time of Politics, Culture and Illness, Duke University Press, 2012. This was a very significant change from the classic lender-of-last resort doctrine, which viewed central bank assistance as precisely that — a last-resort option that should only be activated after all else had failed. Hayek’s mind, by contrast, was not thus constrained: he was observing the same developments as Minsky but these led him to very different ideas. Perhaps that shouldn’t be too surprising either. ¤
 John Maynard Keynes, The General Theory of Employment, Interest and Money, Harcourt, Brace and Company, 1936, p. 217–218. The recognition of this element of true, irreducible uncertainty undercuts claims about market efficiency and equilibrium and so upends the theoretical edifice of orthodox economics. Liquidity assistance for too-big-to-fail institutions has had its counterpart in the tightening survival constraints on those who enjoy no centrality in the fabric of credit and debt. In particular, post-Keynesians are unable to do much with the philosophical thrust and context of Keynes’s intervention, the extent to which it reflects a modernist concern with the malleability of secular time and the fact that it thought of money and finance as means to handle the experience of being caught between an unchangeable past and a wide-open future. L. George Shackle, a largely forgotten political economist, felt that Keynes’s theory had two faces.  Keynes wrote a powerful diagnosis of the limitations of the rationalist mindset. The kind of assistance that major financial institutions have received from public authorities during the neoliberal era is something that J. Of course, finance does not miraculously escape the weight of its past, but that is by itself a trivial observation. Neoliberalism’s appetite for risk, speculation, and uncertainty certainly produces instability, contradictions, and crises. The Federal Reserve would not extend credit against stock holdings and could only see the self-reinforcing spiral of falling prices during stock market crises as confirmation of the correctness of this view. Away from the world of high finance, neoliberalism’s speculative ethos has above all been apparent in the rise of “human capital” thinking (anticipated by Foucault when he wrote in the late 1970s), which encourages us to think of our capacities as assets that require investment and valorization. What bailouts show is not that the rules have been broken by a nefarious set of elites — those are merely the ones in charge of what needs to be done. Keen works in the “post-Keynesian” tradition, which reacts against the way mainstream economics has integrated Keynes’s work by suppressing his most important critical insights. As befits a true believer, who can only see the failure of the predicted collapse to materialize as yet further proof of its impending arrival, he turned the trek into a somewhat carnivalesque occasion, inviting co-walkers who were equally convinced of the inevitability of financial collapse. This is the important truth in the joke that if I owe the bank a thousand dollars that I can’t repay, I’m the one with the problem; but if I owe the bank a million times that amount, the problem is really a shared one — and the bank will have every interest to make sure I don’t default and to accommodate my continuous requests for a new repayment schedule. This simple insight gave Minsky a much deeper appreciation of the role of liquidity: whereas Keynes condemned the “fetish of liquidity” as a refusal to commit patiently to the future production of real value, Minsky thought of it as primarily a “survival constraint.”  Liquidity is like oxygen: a temporary absence of it will kill off even the most robust organism, cutting short what might have been a long and productive life. That it has no way of relating to the more philosophical side of Keynes is perhaps understandable; but the inability or reluctance to see the numerous ways in which Minsky’s work militates against a superficial critique of financial speculation is really just to double down on that basic lapse. But somehow this intuition has never translated into an actual ability to predict crises. Even professional success in one’s field is often not enough to bring economic security within reach. That trend has any number of aspects (and social scientists are currently having a field day documenting them in all their diversity), but they are all in one way or another premised on the continuous growth of asset prices. But the widespread lament over their willful blindness seems misplaced: there was never a realistic possibility that the economics profession would voluntarily break with the methodological sophistication and statistical formalism at the heart of its identity. This is the meaning of “securitization” — to make the flows of everyday life tradable, allowing capital to shape our future by speculating on it. What really mattered was the possibility of keeping the system going, from one day to the next, above all keeping afloat those entities that could drag the whole system down with them. Under Alan Greenspan’s celebrated tenure there emerged something like a preemptive bailout regime, dedicated to alleviating the liquidity pressures on large institutions whenever asset prices so much as threatened to lose their upward momentum. The short-term consequences of the Volcker shock were entirely predictable — precisely those that the Federal Reserve had been concerned to avoid in the years before. Nor does this logic of payment follow abstract scientific principles: my ability to have my access to liquidity extended is really mostly dependent on the likelihood that, were I to fail, I would take my creditors down with me. In 1976, he counseled a full denationalization of money: anyone should be able to start up a bank and issue their own forms of money, with the market deciding on the most appropriate currencies.  Hayek’s proposal was entirely blind to the practical difficulties that had beset such free banking experiments in history (especially in the United States itself, during the 19th century), but he admitted that it was really the spirit rather than the letter of his proposal that mattered. Seen from a very different angle, however, one might imagine that the post-Keynesian appreciation of the openness of the future would have given rise to a certain reluctance to mimic the style and methods of orthodox economics.  See Walter Bagehot, Lombard Street: A Description of the Money Market, Scribner, Armstrong & Co, 1877. The idea that there are quantitative limits to the growth of speculative credit that can be objectively known amounts to a failure to appreciate the open-ended, indefinite character of the future. Wage earners are increasingly locked into relentless debt servicing and live a life haunted by the threat of falling foul of the survival constraint.  Keynes, General Theory, p. And it sees these pernicious ideas and equilibrium models as being at the root of our economic troubles. But during the preceding decades, the American public had become deeply invested in the financial system: whatever their moral misgivings or philosophical convictions about the nature of real value, their retirement savings were increasingly wrapped up in the speculative beauty contest at the center of the economy. Minsky did not seem to see a real solution to the problem — he appeared to view muddling through and ad hoc interventions as the price for avoiding a rerun of the crash and depression. A prominent example of this entire genre of critique is Steve Keen’s widely read book Can We Avoid Another Financial Crisis? ¤
Nor was Minsky’s understanding of public policy as rationalist as Keynes’s. But this misses out on his most important insights, related to the necessity of contingency: he realized that all economic choices and investments were speculative in the sense that their value would only be determined in a future that is unknowable because it will be shaped by events that we cannot predict. In The General Theory of Employment, Interest and Money, he famously compares speculative investment to
those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. 
Such speculative activity was concerned with manipulating the “psychology” of the market, rather than “forecasting the prospective yield of assets over their whole life,”  the fundamental value of things based on the production of material goods and services. A Critique of Economic Doctrines, Cambridge University Press, 1972, pp. But Minsky saw this quite differently. It is also unable to see what Minsky saw — that the politics of liquidity and payment is not a surface-level affair, at best capable of postponing the inevitable bursting of the bubble, but is instead at the core of how economic value works. As a consequence, although bailouts have often elicited concern that the future seems uncertain, the only certainty we have is that we cannot let the banks fail. But perhaps, as social theorists have realized in recent years, that is the point: the precarity produced by the neoliberal economy is less a failure of social integration than a dynamic that is characterized by its own rationality.  Neoliberal wealth is simply not built on solid foundations and tangible values, and the insistence that it should be only serves to distract us from the ways in which neoliberal politics, unconcerned with questions of true value, has been able to organize a massive redistribution of resources and risk exposure over the past decades — what we may think of as a distinctly neoliberal economy of time. The former is consistent with the logic of statistical probability and tamed contingency; in the latter sphere the engagement of risk becomes irrational, unproductive, and speculative. Seen from this angle, the beauty contest — a game of valuation driven by mutual expectations, in which people speculate on what other people are thinking — is really all there is. The Volcker shock here is often cited as evidence for the limited impact of neoliberalism: in practice, it is argued, “monetarism” quickly proved unworkable and was abandoned after only a few years. Minsky thought of debt and speculation not as pathological features of an otherwise robust capitalism based on the production of real things. Keen’s own track record is a case in point.  Keynes, General Theory, p. In a characteristic told-you-so tone, this work chides orthodox economists for their infantile belief in efficient markets and their inability to recognize the systemic nature of financial instability.  Hayek, Denationalisation of Money, Institute of Economic Affairs, 1976. The lender-of-last-resort doctrine is that the central bank can block this dynamic by temporarily taking the assets of the bank in distress onto its books and providing it with cash liquidity instead. The limitations of the Bagehot principle were particularly evident in the early 20th century in the United States, where banks were heavily invested in the volatile stock market. In 2010, after having lost a bet about the timing of the downturn of the Australian housing market (we’re still waiting, by the way), he embarked on a to 200-kilometer penitential walk. Instability became worse over time, and the mid-1970s saw the first bailouts of financial institutions that had gotten themselves into trouble, yet were considered too big to fail. Sharpe, 1982). But this is to view the growth of finance through a reductive and moralistic lens. It is common to attribute this stability to the role of the Glass-Steagall legislation (which separated commercial from investment banking) in repressing speculative finance. But the way in which this system prevented occasional financial downturns created a specific new problem: persistent inflation.