Crisis and the failure of economic theory: The responsibility of economists for the great recession

Economists have been criticized for not having foreseen the crisis that exploded in 2007-2008 when, in fact, responsibility rest heavily on their shoulders. By developing a theory which excluded the possibility that a catastrophic crisis could ever happen, the economics profession has justified decisions and behaviors that caused the Great Recession.

Economists have rightly been criticized for not having foreseen the crisis that exploded in 2007-2008. As Giancarlo Bertocco eloquently argues, responsibility does indeed rest heavily on their shoulders. By developing a theory which excluded the possibility that a catastrophic crisis could ever happen, the economics profession has justified decisions and behaviours that caused the Great Recession. This book presents an alternative theoretical approach built on the lessons of Marx, Keynes, Schumpeter, Kalecki, Kaldor and Minsky, which highlights the structural instability of a capitalist economy and the endogenous nature of the current crisis.