Steve Keen – how economics became a cult

Post-Keynesian economist Steve Keen, of Debunking Economics fame, discusses in the video below his criticisms of mainstream economic thinking and his work constructing a model based on the work of Hyman Minsky, which necessarily incorporates money and finance.

The model can produce periods of economic stability with rising inequality, followed by instability and recession as possible outcomes. These patterns fit very well the experience of many rich countries during the last few decades.

He also touches on the dialectical thinking of Hegel and Marx, which he studied during his early career.

Keen was one of the heterodox or non-mainstream economists to use a mathematical model to predict a major economic crisis a number of years before the Great Recession of 2008 occurred, by modeling Minsky’s ‘financial instability hypothesis’.

One thought on “Steve Keen – how economics became a cult

  1. I wish I could pack as many good points into the space of 13 minutes.

    From my very specific point of view, what needs more spelling out is the connection between the ideological compulsion to view the economy as a barter economy (unaffected in its basic relationships by money) and the misconceived idea of a benignly equilibrating system of free markets (capitalism).

    I see a great strength of MMT in its ability to show that money as it operates in a real economy disproves the mechanisms of equilibration asserted by mainstream economics (e.g. loanable funds theory).

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