Economic growth and cyclical movement are issues of central importance and public concern. They are also areas of immense controversy. Does capitalism have strong tendencies toward steady growth at full employment? Are the causes of fluctuations in output and employment to be found outside the economic system or are they intrinsic to the system? These questions are fundamental to economic and political decisionmaking, and it is the search for answers to these questions which motivates this analysis.

Most of modern radical economics is based on a vision of class conflict and Keynesian market failures, and in this respect the present book is no exception. But there will be no attempt here at exegetical reconstruction and little direct reference to the ‘masters’: Marx, Keynes and Kalecki. Furthermore, although the fundamental ideas are rooted in the traditions of Marx and Keynes, I shall draw on developments and techniques from mainstream economics. The theory to be presented retains basic insights from Marx and Keynes, but it differs from existing formulations of their theories in important ways and some common criticisms of post- Keynesian and neo-Marxian theory are examined explicitly.

The book is addressed not only to a neo-Marxian and post-Keynesian audience but to economists of a more orthodox persuasion as well. The differences between the ‘visions’ of rival schools of thought are profound, and in my view the heterodox framework presented here offers an appealing and fruitful approach to the study of capitalist market economies. Nevertheless, it would be a mistake to exaggerate the differences and incompatibilities between different approaches. In the past, heterodox economists have often been able to draw on work from mainstream economics and vice versa.