Social provisioning and financial regulation: An Institutionalist-Minskyian agenda for reform

Abstract

International audienceThis article seeks to put social provisioning into perspective with regard to the financial instability issue in capitalism. The analysis rests on an institutionalist-Minskyian endogenous instability assumption and maintains that monetary/financial stability is a peculiar public good or specific commons since it concerns the whole society and its viability conditions in time and not only the individuals involved in private financial relations. Consequently, the provision of financial stability becomes essentially a matter of public policy and requires the intervention of public power in order to prevent finance from becoming a public bad. This result relies on the distinction between private "normal" goods and ambivalent/transversal money (and related financial relations). It then points to the necessity of a public organization and tight regulation of finance and financial markets while standard equilibrium models assume that social optimum and stability can be provided by private self-adjustment and market prices mechanisms