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An economy with a stable medium-term growth rate of zero - or any other politically determined growth rate - needs new regulations and institutions to realise this target. Such an economy would look very different compared with the existing type of capitalism we have today in the Global North. In the existing capitalist system, investment demand as well as autonomous demand elements like government demand, export demand or autonomous consumption demand drive the dynamic of GDP and the whole economic system. In a zero growth economy the different demand aggregates are determined by economic policy including heavy intervention in income and wealth distribution and the direction of technological development. Whether such an alternative system is understood as a version of highly regulated capitalism or as a new system is a question of taste.

Today we can learn from the Communist Manifesto that unregulated markets lead to disastrous economic, social, and political developments, which can endanger the reproduction of the capital system itself. The liberal argument, based on Adam Smith's invisible hand - that markets coordinate the selfish actions of millions of people and lead to the welfare of nations -, is a dangerous dream. The consequence is that politicians should not listen to economists, including foreign advisors who preach the liberal dreams of radical versions of capitalist systems. Especially for developing countries, it is vital that they strive for a regulated version of capitalist development. Marx and Engels had a deep understanding of the functioning of capitalism. They underestimated the possibilities to regulate the capitalist system and also allowed the working class to take part in prosperity. However, there is always the danger that capitalist systems evolve with low levels of regulation with the features of capitalism analysed in the Manifesto.

After World War II only a few developing countries were able to catch up to real GDP per capita levels prevailing in developed countries. These successful countries in almost all cases came from Asia and did not follow the free market doctrine in the tradition of the Washington Consensus. There must be theoretical explanations as to why underdevelopment is reproduced and most countries in the world do not catch up. This essay reviews different economic approaches which attempt to explain the lack of convergence. A first group of approaches focuses on the lack of sufficient productivity development (free trade, global value chains, negative terms of trade effects, abundance of scarce resources, premature deindustrialization); the second group focuses on problems to trigger sufficient growth (distorted financial systems, high restrictions on macroeconomic demand management). Countries can suffer from several of these factors, which can explain why development is only possible with the support of comprehensive government policies.

The finance dominated type of capitalism that has developed from the late 1970s and early 1980s on finds its nucleus in the deregulation of the national and international financial system and the switch to a shareholder oriented corporate governance system. Other aspects such as labour market deregulations (including policies to weaken trade unions), the aim of completely free trade around the globe, increasing freedom and power of multinational companies, and privatisation of formerly state functions also belong to the new regime. This finance dominated economic regime seems to be exhausted. The reforms implemented after the subprime crisis and the Great Recession are not sufficient to overcome the deeply rooted problems of the existing system. Reforms to the financial system did not substantially affect the functioning of the shadow banking system and the basic structures of the financial system were not changed. Both, the international financial system as well as the shareholder oriented corporate governance system were largely spared from reforms. Further labour market deregulations are still on the agenda of governments and international institutions. Policies to change income and wealth distribution are not on the political agenda. What is needed is a comprehensive reform agenda which searches for a new relationship between institutions, government policies, and markets.

Abstract. The finance dominated type of capitalism that has developed from the late 1970s and early 1980s on finds its nucleus in the deregulation of the national and international financial system and the switch to a shareholder oriented corporate governance system. Other aspects such as labour market deregulations (including policies to weaken trade unions), the aim of completely free trade around the globe, increasing freedom and power of multinational companies, and privatisation of formerly state functions also belong to the new regime. This finance dominated economic regime seems to be exhausted. The reforms implemented after the subprime crisis and the Great Recession are not sufficient to overcome the deeply rooted problems of the existing system. Reforms to the financial system did not substantially affect the functioning of the shadow banking system and the basic structures of the financial system were not changed. Both, the international financial system as well as the shareholder oriented corporate governance system werelargely spared from reforms. Further labour market deregulations are still on the agenda of governments and international institutions. Policies to change income and wealth distribution are not on the political agenda. What is needed is a comprehensive reform agenda which searches for a new relationship between institutions, government policies, and markets.Keywords. Financialisation, Financial market regulation, Demand management, Income distribution.JEL. E12, E44, F33, G28, P10.

After the Great Recession and unconventional monetary policy, which saved in many countries the financial system, the debate about money and the financial system became popular again. The article analyzes the development of the domestic and global financial systems during the last debates as well as monetary policy and reform policies during and after the Great Recession. It also discusses critical fundamental alternatives for example the proposal to reintroduce a commodity money system or private money like Bitcoins. These debates sometimes mix up the different functions and forms of money. Several contributions based on a Marxian and Keynesian approach clarify functions and forms of money including the possibilities and limitations to stabilize a capitalist economy with monetary policy and reforms of the financial system.

"After the Great Recession and unconventional monetary policy, which saved in many countries the financial system, the debate about money and the financial system became popular again. The article analyzes the development of the domestic and global financial systems during the last debates as well as monetary policy and reform policies during and after the Great Recession. It also discusses critical fundamental alternatives for example the proposal to reintroduce a commodity money system or private money like Bitcoins. These debates sometimes mix up the different functions and forms of money. Several contributions based on a Marxian and Keynesian approach clarify functions and forms of money including the possibilities and limitations to stabilize a capitalist economy with monetary policy and reforms of the financial system." (author's abstract)

Without a lender of last resort financial stability is not possible and
systemic financial crises get out of control. During and after the Great
Recession the US Federal Reserve System (Fed) and the European Central Bank
(ECB) took on the role of lender of last resort in a comprehensive way. The
Fed stabilised the financial system, including the shadow banking system.
However, the chance to fundamentally restructure the financial system was
not used. The ECB was confronted with sovereign debt crises and an
incomplete integration of the European Monetary Union (EMU). It followed a
kind of ?muddling through? to keep the Euro area together. In the EMU not
only a fundamental restructuring of the financial system is needed but also
a deeper economic and political integration. The Fed and the ECB both were
the most important institutions to avoid repetition of the 1930s.