ABSTRACT
The attempt to recreate macroeconomics on microfoundations was misguided from the beginning, and the conclusions of any studies based on these assumptions are, at best, irrelevant to the actual behavior of market economies. When Keynes sought to explain the Great Depression, he returned, somewhat indirectly, to Karl Marx's position though not his explanation: economic crises were endogenous, arising out of the normal operation of a market economy, and no external shock was required to explain them. He pointed out that a change in liquidity preference could lead to an increase or decrease in economic growth and hence employment. Hyman Minsky and Steve Keen have demonstrated a second endogenous route to instability in a capitalist economy. Keynes made few friends among traditional economists when he ridiculed the assumption of monetary neutrality and related assumptions as being appropriate only in economies where money took the form of fresh fish or ripe bananas: unless used at once, it would rapidly lose its value.
