A closer look
The reigning kings of economics love to claim that free markets naturally settle into peaceful equilibrium. Hyman Minsky thought they were delusional. He formulated the Financial Instability Hypothesis, which bluntly states that stability itself is destabilizing. When times are good, investors get complacent, take on increasingly psychotic amounts of debt, and start funding Ponzi-like schemes because they think the party will never end. Eventually, the debt outgrows the underlying income, and the whole system violently collapses. Minsky proved that crashes aren’t anomalies; they are the direct, inescapable result of everything going well.
