This week I have attempted
to convey the motivation behind this blog.
I began by examining the potential roots of capitalism in Florence, emphasising
the role of entrepreneurial innovation and the development of a strong banking
sector in this regard. Attention was
then directed to the ideas of Hyman Minsky, in particular his Financial
Instability Hypothesis which asserts a strong link between capitalism and crises. I also illustrated the power of capitalism in
generating income growth, but questioned the sustainability of such capitalist growth,
as well as highlighting the potential for the manifestation of ‘cowboy’
capitalism.
Next week I will examine
why capitalism may give rise to crises, focusing on the role of speculative
bubbles and the ideas of controversial economist Karl Marx.
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