I have just listened to a BBC analysis program (which is available on iplayer and as a podcast). If you listen you may like to open the BBC News page advertising this, if only for the cartoon which illustrates the “Minsky moment” when an economy goes into freefall.
From the program it appears that economics is going to be taught differently in future. One of the fundamentals of classical economics was that a system would reach an equillibrium state and therefore we could rely on markets to move towards and then stay in a steady position. Minsky’s thinking “Stability is destabilising” is now being introduced into economic textbooks and thinking. This says, amongst other things, that we cannot trust the market to give us stability and we need to do something to manage any build up of debt.
The BBC article explains the theory in more detail but does seem to reflect what actually happened in financial markets quite closely with banks producing inherently riskier mortgage products during the years of apparent stability leading up to the 2008 crash.
It has inspired me to add a few more books to my bookshelf and see if I can get my head around Minsky’s thinking.
But I think it also adds to my argument that we do need to intervene to manage debt in the world. Economists will argue for controlling debt, I am suggesting that we might be better banning debt altogether.