Episode 12
Steve Keen | A History of Economic Theory and the Origins of the Next Financial Crisis
Episode 12
Steve Keen
Steve Keen | A History of Economic Theory and the Origins of the Next Financial Crisis
summary
In this week’s episode of Hidden Forces, host Demetri Kofinas speaks with economist Steve Keen. Steve is Professor of Economics at Kingston University in London and one of a handful of economists to correctly anticipate the Global Financial Crisis of 2008. Professor Keen is also the popular author of “Debunking Economics,” as well as the timely book, “Can We Avoid Another Financial Crisis?”
In today’s conversation, we tear up the textbook of contemporary economics. We dispense with equilibrium. We embrace irrationality. We internalize economic externalities and drop assumptions about the world that do not comport with the reality of lived experience. We begin our history of economics with the physiocrats, enlightenment thinkers of the early 18th century who concerned themselves with the question: “where does stuff come from?” We move through the classical period of economics, exploring the philosophies of Adam Smith and David Ricardo. We stop to question the assumptions of the Newtonian minded neoclassicists of the late 19th and early 20th centuries, who saw fit to squeeze a complicated world into a set of simple models. Where did our ideas of rational preference, utility maximization, and market equilibrium come from? How have these ideas been debunked by the events, insights, and theories of the last 100 years? What was the role of John Maynard Keynes and his Keynesian revolution? Where did he and the Austrian Friedrich von Hayek meet? Where has the evolution of economics taken us since World War II? What is the role of banking in the economy? How is money created? How does it circulate? What is the role of credit? How might this almost Godly instrument of wealth creation have become a source of global instability and financial distress? Finally, Steve Keen and Demetri explore the landscape of the modern economy. They look at China, with its ghost cities and massive state-directed banking system. They explore Australia, Canada, and South Korea, as possible sources for the next financial crisis and consider possible solutions for society, as well as the individual.
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
Join the conversation at @hiddenforcespod
bio
Steve Keen (born 28 March 1953) is an Australian economist and author. He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen’s thinking about economics include John Maynard Keynes, Karl Marx, Hyman Minsky, Piero Sraffa, Augusto Graziani, Joseph Alois Schumpeter, ThorsteinVeblen, and François Quesnay. Hyman Minsky’s financial instability hypothesis forms the main basis of his major contribution to economics which mainly concentrates on mathematical modelling and simulation of financial instability. He is a notable critic of the Australian property bubble, as he sees it.
Keen was formerly a Professor of economics at University of Western Sydney, until taking voluntary redundancy in 2013. In 2014, he became a professor and Head of the School of Economics, History and Politics at Kingston University in London. He remains a Professor of Economics at Kingston University, is an Honorary Professor at University College London, and is now crowdfunded via Patreon at https://www.patreon.com/ProfSteveKeen.
Keen developed the Open Source monetary modelling program Minsky (see https://sourceforge.net/projects/minsky/). His latest books are Can we avoid another financial crisis? and eCONcomics: Taking the CON Out of Economics. He is currently working on the role of energy in production, a 3rd edition of Debunking Economics, and a cartoon book on money called “Funny Money”.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Apud ceteros autem philosophos, qui quaesivit aliquid, tacet; Num igitur eum postea censes anxio animo aut sollicito fuisse? Quis tibi ergo istud dabit praeter Pyrrhonem, Aristonem eorumve similes, quos tu non probas? Varietates autem iniurasque fortunae facile veteres philosophorum praeceptis instituta vita superabat. Duo Reges: constructio interrete. Iam in altera philosophiae parte.
Quid iudicant sensus? Vide, ne etiam menses! nisi forte eum dicis, qui, simul atque arripuit, interficit. Quod ea non occurrentia fingunt, vincunt Aristonem; Tu autem negas fortem esse quemquam posse, qui dolorem malum putet.
Ad corpus diceres pertinere-, sed ea, quae dixi, ad corpusne refers? Quasi ego id curem, quid ille aiat aut neget. An tu me de L. Quam tu ponis in verbis, ego positam in re putabam.
Non potes, nisi retexueris illa. Quare attende, quaeso. Quod si ita se habeat, non possit beatam praestare vitam sapientia. Ita enim vivunt quidam, ut eorum vita refellatur oratio. Heri, inquam, ludis commissis ex urbe profectus veni ad vesperum. Quem ad modum quis ambulet, sedeat, qui ductus oris, qui vultus in quoque sit? Indicant pueri, in quibus ut in speculis natura cernitur.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Apparet statim, quae sint officia, quae actiones. Si est nihil nisi corpus, summa erunt illa: valitudo, vacuitas doloris, pulchritudo, cetera. Utilitatis causa amicitia est quaesita.
Tu enim ista lenius, hic Stoicorum more nos vexat. Et adhuc quidem ita nobis progresso ratio est, ut ea duceretur omnis a prima commendatione naturae. Duo Reges: constructio interrete. Videamus animi partes, quarum est conspectus illustrior; Tamen aberramus a proposito, et, ne longius, prorsus, inquam, Piso, si ista mala sunt, placet.
Quod quidem iam fit etiam in Academia. Scientiam pollicentur, quam non erat mirum sapientiae cupido patria esse cariorem.
Sed erat aequius Triarium aliquid de dissensione nostra iudicare. Quid ei reliquisti, nisi te, quoquo modo loqueretur, intellegere, quid diceret? Vitiosum est enim in dividendo partem in genere numerare. Quid, si non sensus modo ei sit datus, verum etiam animus hominis?
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Quod autem ratione actum est, id officium appellamus. Sic enim censent, oportunitatis esse beate vivere. An vero displicuit ea, quae tributa est animi virtutibus tanta praestantia? Quod ea non occurrentia fingunt, vincunt Aristonem; Si verbum sequimur, primum longius verbum praepositum quam bonum. Duo Reges: constructio interrete. Iubet igitur nos Pythius Apollo noscere nosmet ipsos. Ergo opifex plus sibi proponet ad formarum quam civis excellens ad factorum pulchritudinem? Primum Theophrasti, Strato, physicum se voluit;
Eorum enim est haec querela, qui sibi cari sunt seseque diligunt. Quid est igitur, cur ita semper deum appellet Epicurus beatum et aeternum? Terram, mihi crede, ea lanx et maria deprimet. Deinceps videndum est, quoniam satis apertum est sibi quemque natura esse carum, quae sit hominis natura. Sed vobis voluptatum perceptarum recordatio vitam beatam facit, et quidem corpore perceptarum. Quae similitudo in genere etiam humano apparet. Philosophi autem in suis lectulis plerumque moriuntur. Sed quid minus probandum quam esse aliquem beatum nec satis beatum? Non enim ipsa genuit hominem, sed accepit a natura inchoatum.
Quorum sine causa fieri nihil putandum est. Nemo igitur esse beatus potest. At hoc in eo M. Videamus animi partes, quarum est conspectus illustrior; Quis Aristidem non mortuum diligit? Frater et T.
Sed eum qui audiebant, quoad poterant, defendebant sententiam suam. Vide, quantum, inquam, fallare, Torquate. Non enim ipsa genuit hominem, sed accepit a natura inchoatum. Ergo hoc quidem apparet, nos ad agendum esse natos. Tu vero, inquam, ducas licet, si sequetur; Ita multo sanguine profuso in laetitia et in victoria est mortuus. Nunc haec primum fortasse audientis servire debemus. Rapior illuc, revocat autem Antiochus, nec est praeterea, quem audiamus. Ergo opifex plus sibi proponet ad formarum quam civis excellens ad factorum pulchritudinem? Et nemo nimium beatus est;
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Primum in nostrane potestate est, quid meminerimus? Qui non moveatur et offensione turpitudinis et comprobatione honestatis? Equidem e Cn. Est igitur officium eius generis, quod nec in bonis ponatur nec in contrariis. Audio equidem philosophi vocem, Epicure, sed quid tibi dicendum sit oblitus es. Duo Reges: constructio interrete. Eadem nunc mea adversum te oratio est.
At ille pellit, qui permulcet sensum voluptate. Invidiosum nomen est, infame, suspectum. Aliena dixit in physicis nec ea ipsa, quae tibi probarentur; Eam stabilem appellas. Iam contemni non poteris. Haec para/doca illi, nos admirabilia dicamus. Atqui iste locus est, Piso, tibi etiam atque etiam confirmandus, inquam; Facit enim ille duo seiuncta ultima bonorum, quae ut essent vera, coniungi debuerunt;
Memini me adesse P. Non quaero, quid dicat, sed quid convenienter possit rationi et sententiae suae dicere. Vidit Homerus probari fabulam non posse, si cantiunculis tantus irretitus vir teneretur; Negat esse eam, inquit, propter se expetendam. Si verbum sequimur, primum longius verbum praepositum quam bonum.
Non est enim vitium in oratione solum, sed etiam in moribus. Cum salvum esse flentes sui respondissent, rogavit essentne fusi hostes. Quae autem natura suae primae institutionis oblita est? Pisone in eo gymnasio, quod Ptolomaeum vocatur, unaque nobiscum Q.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cur post Tarentum ad Archytam? Ipse Epicurus fortasse redderet, ut Sextus Peducaeus, Sex. Quare ad ea primum, si videtur; Roges enim Aristonem, bonane ei videantur haec: vacuitas doloris, divitiae, valitudo; Duo Reges: constructio interrete.
Quodsi ipsam honestatem undique pertectam atque absolutam. Satisne vobis videor pro meo iure in vestris auribus commentatus? Et hunc idem dico, inquieta sed ad virtutes et ad vitia nihil interesse. Nihil illinc huc pervenit.
Est autem officium, quod ita factum est, ut eius facti probabilis ratio reddi possit. Alterum significari idem, ut si diceretur, officia media omnia aut pleraque servantem vivere. Tria genera bonorum; Idem iste, inquam, de voluptate quid sentit? Contemnit enim disserendi elegantiam, confuse loquitur. Quamquam tu hanc copiosiorem etiam soles dicere. Nec vero alia sunt quaerenda contra Carneadeam illam sententiam.
Nunc de hominis summo bono quaeritur; Et non ex maxima parte de tota iudicabis? Luxuriam non reprehendit, modo sit vacua infinita cupiditate et timore. Quod dicit Epicurus etiam de voluptate, quae minime sint voluptates, eas obscurari saepe et obrui. Iam id ipsum absurdum, maximum malum neglegi. Omnes enim iucundum motum, quo sensus hilaretur. Videamus animi partes, quarum est conspectus illustrior; Eodem modo is enim tibi nemo dabit, quod, expetendum sit, id esse laudabile. Sed ille, ut dixi, vitiose. Quarum ambarum rerum cum medicinam pollicetur, luxuriae licentiam pollicetur.
