Conventional Economics and the Theories of the Possibility of Crisis

Abstract

Starting with the distinction between the theory of the necessity of crisis with respect to the idea of crisis as a mere possibility, the author addresses the meaning of crisis in orthodox and most heterodox approaches. Beyond the differences in economic analysis, this chapter argues that these theories have one element in common: the crisis would be the product of certain failures, and therefore it is avoidable. If the crisis is merely a possibility, there can be a capitalism without crisis. Behind this conception, a number of theoretical foundations must be explicit, since they are normally hidden or not properly analyzed. Within this critical approach, the author focuses around the role of economic policy, income distribution and financial capital for the theory of crisis.