Was Hyman Minsky a Post Keynesian?

Hyman Minsky (1919–1996) is frequently classified as a Post Keynesian. Minsky’s financial instability hypothesis is an important insight into financial markets and business cycles; Minsky undoubtedly had an affinity with the Post Keynesian school, and his work is taken very seriously in Post Keynesian economics (most notably by Steve Keen). Nevertheless, Minsky was an idiosyncratic Keynesian and the question whether he should be categorised as a Post Keynesian is debateable. Paul Davidson has made the following argument:

“Hyman Minsky is identified [sc. in King 2002: 110] as the second American Post Keynesian … Minsky attended many ‘Post Keynesian’ summer schools in Trieste, Italy as did Kaleckians and many Sraffians who now identify themselves as neo-Ricardians. Accordingly, mere attendance at the Trieste school does not make one a Post Keynesian. Minsky often told me that he never wanted to be identified as a Post Keynesian (hence he fails King’s test of identifying oneself as a Post Keynesian). According to King, Minsky was not an advocate of incomes policies — a hallmark of Post Keynesianism in America. King states that Minsky ‘had no particular objection to aggregate supply-demand analysis or to a tax based incomes policy — but did not regard them as especially interesting or important’ … It is hard to understand why someone who thinks that Keynes’s aggregate supply and demand analysis of the principle of effective demand is neither interesting nor important can be classified as a Post Keynesian … In reality Minsky was, and always wanted to be, a mainstream Keynesian who used the Modigliani variant of the ISLM system and whose major distinction from other mainstream Keynesians was that he possessed knowledge of actual real world financial markets. His ‘inherently unstable’ financial fragility hypothesis … was based on his reading of the activities on financial markets during the period between the onset of the Great Depression and the beginning of the Second World War …. Since Minsky refused to adopt Keynes’s principle of effective demand as the basic analytical system, and instead adopted an analytical structure that relied on some of the restrictive axioms of the special case classical theory, it is difficult for me to understand why King classifies Minsky as a Post Keynesian much less the ‘second US Post Keynesian’” (Davidson 2003–2004: 252–253).

Yet it is very difficult to classify Minsky as a neoclassical synthesis Keynesian or New Keynesian either, for both these varieties of Keynesian theory were subject to heavy criticism in these papers of Minsky:

“An Introduction to Post-Keynesian Economics,” 1986.

“Beyond Post-Keynesian Economics,” 1989.

“Salient Attributes of Post- Keynesian Economics,” 1992–1993.

“The Essential Characteristics of Post-Keynesian Economics,” 1993.

It is perhaps better to say that Minsky was a heterodox Keynesian with a strong affinity for the Post Keynesian school, even if he “never wanted to be identified as a Post Keynesian” himself.

But then, I suppose, the history of economics has the odd brilliant figure (e.g., George L. S. Shackle*) who marched to his/her own drum, never quite fitting into neat classifications.

NOTE
* Shackle is sometimes classified either as an Austrian or Keynesian, or hybrid Austrian-Keynesian.

UPDATE

There is a very interesting paper here by Matias Vernengo in which the question of how to classify Minsky (on pp. 5-6) is also raised:

Matias Vernengo, “The Return of Vulgar Economics: A Rejoinder to Colander, Holt and Rosser,” Working Paper No: 2011-14.

Matias Vernengo agrees that Minsky was a heterodox Keynesian:

“Minsky thought so much of the mainstream (standard course) that he would eliminate the course! Minsky may have been guarded about being seen as part of a particular heterodox group, not because he was cutting edge mainstream, but because he was too original to be boxed in a particular label.”

Matias Vernengo, “The Return of Vulgar Economics: A Rejoinder to Colander, Holt and Rosser,” Working Paper No: 2011-14. p. 6.

BIBLIOGRAPHY

Davidson, P. 2003–2004. “Setting the Record Straight on ‘A History of Post Keynesian Economics,’” Journal of Post Keynesian Economics 26.2 245–272.

King, J. E. 2002. A History of Post-Keynesian Economics since 1936, Edward Elgar, Chelten.