Money, Finance, and Capitalist Development, edited by Philip Arestis and Malcolm Sawyer. Northampton, Mass.: Edward Elgar Publishing, 2001. Cloth, ISBN: 1840645989, $95.00. 269 pages.
This book presents revised and updated versions of six essays previously published in International Papers in Political Economy. Each chapter is critical of neoclassical theory and presents an alternative at least partly rooted in Post Keynesian economics. It is a valuable collection for those interested in contemporary economic issues: As editors Philip Arestis and Malcolm Sawyer explain in their introduction, "There can be little doubt that the financial sector is much more important now than it was even 20 or 30 years ago" (p. 1).
John and Wendy Cornwall begin the essays by outlining what they call an "evolutionary-Keynesian" analysis of capitalist performance (p. 11). They correctly note that economic change cannot be adequately analyzed within the neoclassical framework, which assumes a self-regulating system always tending toward a full-employment equilibrium. Their alternative stresses aggregate demand and its institutional determinants. It also stresses endogenous structural change and the impact of history upon capitalist development.
Although the Cornwalls' approach is promising, their brief description of how this applies to advanced capitalist nations is somewhat disappointing. Their explanation for the demise of the postwar "golden age" of high employment stresses both a wage-determination system driven by unions' exercise of market power and the rise of labor militancy in the late 1960s and early 1970s; it is neither new (1) nor convincing. A more comprehensive application of the evolutionary-Keynesian approach seems warranted, one bringing attention to other factors including corporate businesses practices, the rise of global competition, and the spread of financial fragility. (2)
In fact, the following chapter, by Jim Crotty and Gary Dymski, implicitly adopts that type of broader application of the evolutionary approach. Their chapter examines the East Asian economic crisis of the late 1990s in the context of the transformation of international financial relations and economic development policies from the "golden age" of 1946-1971 to the "neoliberal regime" that began in 1980. Their "central point" is that the Asian crisis involves "structural complexity: it cannot be reduced to a single mechanism operating at a single behavioral level" (p...