As I noted earlier, I have recently been posting much less as I am trying to catch up on what I think is some very crucial reading. One of the books that I am carefully revisiting is Hyman Minsky's Stabilizing an Unstable Economy. First published in 1986, it has become widely regarded as the go-to reference work on the current crisis. As recently as last year, before the release of the current edition, used copies were fetching prices in the hundreds of dollars.
An idea of Minsky's that I have found particularly intriguing is that while government certainly has a fiscal role to play in the increasingly tumultuous crises that have beset western economies over the past four decades, a much larger part of that effort should be as an employer of last resort.
And among Minsky's reasons for this policy prescription (others including dampening of inflation and the empowerment of workers) is that many if not most of social services programs directed at workers are captured by the professionals who deliver them, through a variety of successful rent-seeking behaviors. Thus increased money for education is captured by increased salaries and reduced workloads for teachers or by reduced teaching loads and increased research funding for academics. Doctors and pharmacuetical companies capture most increases in health care spending.
This, of course, is a standard argument of public choice theorists -- one that was applied to great effect in the reversal of the role of the state a generation ago. But here it is applied in a way that is much more in tune with a progressive agenda. Minsky does not suggest that workers be left to the tender mercies of the market, far from it. What he argues, however, is that they should be helped in ways that benefit them and not their erstwhile benefactors. This, of course, is in accord with John McKnight's work, as found in The Careless Society and in much of his development work, which I have found so helpful of the years.
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