Charles J. Whalen

Financialization and Income Inequality: A Post Keynesian Institutionalist Analysis

One of the most troubling developments in recent years has been widening income inequality in the United States and elsewhere. We argue Post Keynesian Institutionalism (PKI) provides insight into the causes of increasing income inequality and our contribution is threefold. First, we compare PKI to the “financialization” literature, noting key similarities and differences. Second, we examine changes in financial structure and income inequality for a sample of developed nations, showing that financialization has increased in nearly all the countries sampled and that this increase has generally been accompanied by a rise in income inequality. Third, we demonstrate that the development of modern financial structures does not preclude an expansive welfare state and egalitarian public policies. Our finding is congruent with Hyman Minskys conception of PKI, which stressed both that “economic systems are not natural systems” and that capitalism comes in as many varieties as Heinz has of pickles.

Post-Keynesian Institutionalism after the Great Recession

This article surveys the context and contours of contemporary Post-Keynesian Institutionalism (PKI). It begins by reviewing recent criticism of conventional economics by prominent economists as well as examining, against the backdrop of the current context, important research that paved the way for PKI today. Then it sketches essential elements of PKI – drawing heavily on the contributions of Hyman Minsky – and identifies directions for future research. Although there is much room for further development, PKI offers a promising starting point for economics after the Great Recession.

Toward ‘Wisely Managed’ Capitalism: Post-Keynesian Institutionalism and the Creative State

Post-Keynesian Institutionalism (PKI), a synthesis of post Keynesian and institutional economics, emerged in the USA as a strand of evolutionary economics in the early 1980s and has attracted increasing attention in recent years. This article examines milestones in the development of PKI, devoting particular attention to the tradition’s conception of the role of the state. The first section identifies antecedents to PKI in the writings of John R. Commons and John Maynard Keynes. The second describes how PKI emerged against the backdrop of increasing dissatisfaction with neoclassical Keynesianism in the era of stagflation. The third summarizes the subsequent contributions of Hyman P. Minsky, whose work was a model of PKI in the 1980s and 1990s. The final two sections outline PKI’s contemporary characteristics and identify elements of an agenda for future research. PKI has always been about achieving a more humane form of capitalism, which requires the state to play a creative role in shaping economic life.

Financial instability and economic security after the great recession

This timely book rethinks economic theory and policy by addressing the problem of economic instability and the need to secure broadly shared prosperity. It stresses that advancing economics in the wake of the Great Recession requires an evolutionary standpoint, greater attention to uncertainty and expectations, and the integration of finance into macroeconomics. The result is a broader array of policy options – and challenges – than conventional economics presents.

Hyman Minsky's Theory of Capitalist Development

During the last decade of his life, Hyman Minsky drew on insights acquired from Joseph Schumpeter in an effort to explore the long-term development of capitalism. He believed such an exploration would underscore the economic implications of postwar financial-system innovations and could encourage a broad discussion regarding the appropriate structure of the U.S. economy. This paper focuses on the theory of capitalist development that Minsky produced during that decade. After describing the purposes of Minskys exploration, his theory is outlined both in terms of its essential elements and as it applies to the U.S. economy. In addition to emphasizing the relations between finance and business, Minsky identified a transition through at least five distinct stages of capitalism: from the merchant-capitalist era to a recent period dominated by money managers. A concluding section identifies a number of research directions suggested by Minskys analysis.

An Institutionalist Perspective on the Global Financial Crisis

This innovative book focuses on the current global financial crisis and the inadequacies of the economic theories being used to guide policy. In so doing, it tackles the economic theories that have been used firstly to understand its causes and thereafter to contain the damage it has brought.

Towards a more rapid recovery: incorporating subsidiarity into macroeconomic policy

This timely book rethinks economic theory and policy by addressing the problem of economic instability and the need to secure broadly shared prosperity. It stresses that advancing economics in the wake of the Great Recession requires an evolutionary standpoint, greater attention to uncertainty and expectations, and the integration of finance into macroeconomics. The result is a broader array of policy options – and challenges – than conventional economics presents.

Social Unionism in Western New York: The Case of the Economic Development Group

Labor-community engagement—often called social unionism—has a long history, but it and academic attention to it have been growing since 1980. This article examines one manifestation in western New York: the labor-led Economic Development Group (EDG), which emerged in the late 1990s as a way for that region’s union leaders to engage in economic development activities. The first section surveys the literature on labor—community engagement, with an emphasis on the U.S. experience at the metropolitan level. The next traces the EDG’s origins and early development. Then three sections examine the EDG’s major initiatives: in labor relations, regional energy, and workforce development, the latter of which includes a neighborhood revitalization component. Current challenges and opportunities are then identified, and lessons of the EDG’s experience are highlighted. A final section includes suggestions for future research. A number of EDG projects appear to be on the leading edge of innovation with respect to regional development; thus, the case of the EDG warrants the attention of academics and practitioners, including policy makers interested in improving the well-being of the nation’s working families.

Union Engagement in Western New York Economic Development: An Institutional Analysis

This chapter presents an institutional analysis of two organizations established by union members to give labor a voice in regional economic development in western New York (WNY), one that emerged in the 1970s another created in the 1990s. Employing the institutionalist comparative case method, the analysis highlights the organizations similarities and differences. Then, drawing attention to key “limiting” factors, a theory is outlined, offering three scenarios for future labor involvement in WNY economic development. Central to those scenarios is the finding that labor needs not only a voice but also a suitable message.

Federal Budget Balance: Tonic or Toxin? Fiscal Irresponsibility: The Balanced Budget Amendment of

Continuous federal budget deficits and a rising public debt have been presented in terms that have produced mounting dissatisfaction with government. One solution offered to deal with this discontent has been a constitutional amendment to balance the federal budget. In a working paper, Charles J. Whalen presents a historical review of balanced budget legislation, including the constitutional amendment proposed in the Republican Contract with America. He outlines the arguments in favor of and against such legislation and concludes that such an amendment would be both politically and economically misguided. In light of this conclusion, Whalen offers an alternative direction for federal budgetary policy.