Finance-Led Capitalism

In Finance-Led Capitalism , bestselling author and economist Robert Guttmann provides a new conceptual framework to assess the dominate role of modern finance within the workings of our contemporary economic system. This lively and provocative read will challenge some of the core beliefs about modern finance and the world economy.

“The text is an engaging read and a lucid window into a complex arena of financial activity. The historical narrative will be instructive, curiously, for both students of business and Marxists alike. Guttmann offers a welcome presentation of fictitious capital, introducing an unlikely finance audience to Marx, going beyond the business-cycle analytics of post-Keynesian theory.” (Joseph Ricciardi, Science & Society, Vol. 82 (04), October, 2018)

'Professor Guttmann's essay Finance-Led Capitalism provides a brilliant and clear account of the dramatic impact of financialization on the US and the world economy. This original and highly readable book takes us into the fields of financial instability, shadow banking, and the new paths of finance. The author makes a convincing case for a comprehensive reregulation of finance and provides a critical analysis of ongoing reforms, which present a challenge for banks and public policy makers alike.' Professor Dominique Plihon, Paris Nord University

'Robert Guttmann's Finance-Led Capitalism is more than just an excellent historical analysis of the world and US economies from the financial viewpoint. In his book the distinguished professor also offers a fascinating lesson on the classical theories as well as the ones he developed himself to understand the growth and crises associated with capitalism as it became dominated by finance.' Luis Carlos Bresser-Pereira, Former Finance Ministerof Brazil and Professor Emeritus, FGV-EESP in Sao Paulo

'Guttmann takes the reader on a fine pedagogic trip through the US-centered globalized world of finance, with its banks, marketable securities, derivatives, and shadow banking sector, showing that the 2008 financial crisis that he describes with clarity has its origins in the stagflation of the 1970s and in the institutional and regulation changes that were consequently implemented in the 1980s, discussing as well post-crisis regulations and the online finance alternatives of the future.' Marc Lavoie, Department of Economics, University of Ottawa

'Even those economists that predicted the last financial crisis didn't understand why it evolved into the Great Recession because they did not understand the process of financial innovation that created the shadow banking system that provided the transmission mechanism from the small subprime mortgage market crisis to the entire financial system and brought the real economy toits knees. Guttmann's book provides insight into this process by applying network theory to the evolution of shadow banking, but it's most important contribution is its forward look to identify the forces of profit driven innovation that should help economists understand and better predict the next bout of financial instability.' Jan Kregel, Director of Research at the Levy Economics Institute of Bard College

'Robert Guttmann's book is political economy as it should always be. It provides a rich analysis of the development of finance-led capitalism. Building on the French Regulation School and Hyman Minsky's theory of financial instability, Guttmann convincingly argues that we are facing the structural crisis of this accumulation regime. This book is a 'must read' for those who want to understand the contradictions of finance-led capitalism and who are interested in strategies for developing a more robust global financial system.' Eckhard Hein, Eckhard Hein, Berlin School of Economics and Law, Germany

Finance-Led Capitalism demonstrates why Robert Guttmann is one of our best analysts in financial and monetary matters. Using the French Regulationnist theoretical framework, he gives us a very clear account of the institutional transformations that leads from the post-WWII Fordist accumulation regime to the finance-led capitalism of today. André Orléan, Research director at CNRS and Director of Studies at the Ecole des Hautes Etudes en Sciences Sociales (EHESS)

'Guttmann offers the best available post-Keynesian interpretation of the financial crisis of 2007-9, an analysis unusually well-informed about the operations of both shadow banking on the one hand and the international monetary system on the other. For him, the crisis marks the end of the 1982-2007 period of 'finance-led capitalism' during which three sequential asset bubbles in the US created the conditions for absorbing the export-led growth strategies of the global periphery. Readers may question whether his preferred course for the future an upgrading of the role of the SDR in order to avoid the instability of an emerging two- or three-bloc international system - is realistically available. But there can be no question that the political Left, so often distracted by the satisfactions of banker bashing, needs this book badly.' Perry Mehrling, Professor of Economics at Barnard College, Columbia University, author of The New Lombard Street: How the Fed Became the Dealer of Last Resort.

Robert Guttman isProfessor of Economics at Hofstra University, USA