Money Manager Capitalism and the Coronavirus Pandemic: A Post-Keynesian Institutionalist Analysis of Inadequate Industrial Capacity

Abstract

The COVID-19 pandemic shook the world economy and triggered one of the worst economic downturns in U.S. history. Fundamental features of the current economic era—known as “money manager capitalism” (MMC)—have contributed to the severity of the crisis, and this article focuses on the era’s extreme subordination of industrial production to financial pursuits. This post-Keynesian institutionalist analysis begins with a brief overview of MMC and then traces inadequate industrial capacity during the pandemic to several consequences of the single-minded focus on shareholder value: offshore outsourcing, corporate mergers and acquisitions, and stock buybacks. The article closes by stressing that it will not be easy to fix the systemic problems that the pandemic has exposed; the necessary reforms must be far reaching, and the opposition will surely remain fierce.