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Seven paradoxes of capitalism...or is a theory of modern economies still possible ?

  • Economics
  • Law
  • Philosophy
  • Political Science


Microsoft Word - CO9620.doc October 1996 N° 9620 THE SEVEN PARADOXES OF CAPITALISM..... .....Or is a theory of modern economies still possible? Robert BOYER CEPREMAP, CNRS, E.H.E.S.S. 142, Rue du Chevaleret 75013 PARIS, France Tél. : +33 (0)1 40 77 84 28 - Fax : +33 (0)1 44 24 38 57 e-mail [email protected] The ideas of this paper have been first presented to the 8th International conference on Socio- Economics (SASE) held at Geneva University, July 12-14, 1996. The present draft is prepared for a seminar to be held at the University of Wisconsin-Madison, November 18- 19th, 1996. 1 I - AN OLD ISSUE FOR POLITICAL ECONOMY, A RENEWED CONTEMPORARY INTEREST The possibility, nature and evolution of capitalism has been a major concern for philosophers and political scientists since the very early emergence of markets. In historical retrospect one observes an oscillation between two visions. For classical and more recently neoclassical economists, the market mechanism is basically self-equilibrating, the only source of crises being clumsy interventions from political authorities or legacy from inadequate and obsolete social relations. But recurrently, Marxists and afterwards Keynesians, argue quite contrarily that the pure market mechanism may lead to major crises, financial disequilibria, rising inequalities or stagnation and long run unemployment. Therefore State interventions concerning nationalization or socialization of investment decisions may help to maintain the viability of a mature capitalist system. This long swing in ideas about the role of market has been clearly pointed out by Karl Polanyi (1944; 1983). The second vision is as the roots of post-world war II unprecedented growth regime: multifaceted interventions by the State on credit and monetary supply, labor legislation, competition, exchange rate and external trade have promoted a new form of cap

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