#964 Steve Keen (@ProfSteveKeen): Rebuilding Economics from the Top Down

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RECORDED ON JUNE 17th 2024.
Dr. Steve Keen is former Associate Professor of Economics at University of Western Sydney, and former Professor and Head of the School of Economics, History and Politics at Kingston University in London. He is now an independent researcher in Economics, as well as a Distinguished Research Fellow at the Institute for Strategy Resilience & Security at University College London. He is the author of several books, the latest one being Rebuilding Economics from the Top Down.

In this episode, we focus on Rebuilding Economics from the Top Down. We first discuss what economics is and its role in society, and the main tenets of mainstream economics, with a focus on supply and demand. We also discuss why these ideas are mainstream, and its real-life consequences. We talk about the 2008 economic crisis and how it should have been dealt with. We talk about an alternative approach to economics based on complex systems theory, and explore the example of how employment rates and wages evolve over time. We also discuss debt, inflation, how prices are determined, how money is created, and the role of banks. We talk about what GDP is, and the differences between financial capitalism and industrial capitalism. Finally, we discuss the risks associated with climate change, and economic solutions to it.

Time Links:
00:00 Intro
00:27 What is economics?
01:30 The tenets of mainstream economics
09:30 Supply and demand
24:35 Why are these ideas the mainstream?
33:35 How economics has real-life consequences
36:37 The 2008 economic crisis
43:29 Complex systems theory in economics
50:54 Employment rates and wages
57:41 Debt
1:04:01 Understanding inflation
1:12:07 How prices are determined
1:14:47 How money is created, and the role of banks
1:27:30 What is GDP?
1:37:43 Financial capitalism and industrial capitalism
1:42:03 The risks of climate change
2:02:37 Economic solutions to climate change
2:05:33 Follow Dr. Keen’s work!
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Twitter handle: @ProfSteveKeen
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#TheDissenter #SteveKeen #Economics

[ProgressiveEconomicsSupporter]

Great 2 hours with Prof. Keen and with very good questions!!! 😎🙏🇩🇪

[MichaeldeSousaCruz]

This is a delight to see @ProfSteveKeen!!! Please get more MMT (Modern Money Theory) economists on, like Warren Mosler, L. Randall Wray, and Scott Fullwiler. Muito Obrigado!

[ianchui]

1:06:00 is your rallying cry to buy and hold stocks. Inflation is mostly driven by markups by corporations

[aminam]

The presence of the dollar as a primary reference in the global financial system is a real danger, and the main reason is the true value of that dollar and the amount of profits that are generated through domination of the global financial system.

[aminam]

The economy is not just a mathematical equation that can be completely controlled and predicted. For example, whoever rules has a direct impact on the economy, as does the media and fraud, etc.

[aminam]

Who gives values to things and on which basis? Does the one who did that take his own interests as the basis of that evaluation?
It’s important to rethink thoroughly about the global financial and economic system.

[aminam]

Some governments of underdeveloped countries have deliberately changed the exchange rate with the aim of reducing the amount of foreign currency expenditures (the dollar), by reducing the actual value of citizens’ salaries by lowering the exchange rate (unofficially, but with the aim of fraud). Which led to inflation (the Bedouins act as pimps for foreigners). For example, you find ambassadors from Western countries without embassies and they use militias to protect them while on the move, with the aim of spreading strife and chaos (state instability means plundering of public money resulting from the plundering of natural resource revenues and transferring them to the banks of the countries of those ambassadors). )...

[aminam]

Do you still remember that experiment (location, orientation, calculating distances, the artificial environment that imitate planet earth with artificial light to resemble sunlight, ….etc)? this one seems familiar: “We Were Completely Wrong About Why Bugs Are Attracted To Lights
Anton Petrov”

[aminam]

There is someone who has created stock exchange for speculation (evaluating things). How will he evaluate what he owns and what he will buy? Will he give an unreal and exaggerated value to what he owns, while granting or imposing a low value that does not represent the true value of what he will buy, and thus the stock exchange he created is just a platform for fraud?
Who founded the stock market and on what basis? Was the rest of the world consulted or was fraud imposed?

[aminam]

I think this will make the matter more clear: Suppose aliens landed on planet Earth with a spacecraft the size of an island and had precious metals and advanced technology, …. etc. What currency will be used to complete commercial transactions between human beings and aliens?! Dollar? There will be no value for the dollar then! Who gives, or rather imposes, value on things and on what basis?!

[aminam]

All must realize the danger of the dominance of one country’s currency over the global financial system and using it as a reference, as this will lead to the dissolution of the economies of the weak economies in that unknown financial system (no one knows the true value of the dollar and what is the quantity that was printed as a result of the dominance of that global financial system)... . Etc. Therefore, a new global financial system must be established and solutions must be found for the dominance of one country’s currency over that global financial system and the profits it earns, other than the dissolution of the economies of the countries in that financial system and the amount of fraud and manipulation to compensate for the deficit as a result of excessive spending at the expense of the rest of the countries of the world.

[aminam]

Floating the currency only succeeds if there is a strong and stable economy, and strong, high-quality industry is the most guarantee and stability of the economy. Economically weak countries cannot float their local currency without serious consequences, so stable countries with a weak economy do not resort to floating their currency, but rather work to stabilize their national currency through multiple sources of income for the national income. This is the reason why some European countries, such as the Czech Republic and others, returned their national currency, as they cannot resist the economy of economically dominant countries such as Germany and France. This applies to the effect of making the currency of a foreign country, such as the dollar and the euro, a reference in third world countries.

[aminam]

They talk a lot! The issue revolved around the marketing of toxic debts (fraud), and the winner from the fraud was the owner of the dominant currency, something like the fraudster putting his excrement resulting from fraud in the market and promoting it as a promising commodity.

[aminam]

This may be more clear: Suppose you own something of value and it is valued based on a currency of unknown value that dominates the global financial system, then you will lose that valuable thing in exchange for something of unknown value, even if it is able to buy something else of value as a result of its dominance of the global financial system. In short, the global financial system may collapse one day, so what will remain then? (What makes money maintain its value? Does that money represent, for example, gold as its balance? Do all those billions of dollars really represent anything of value, or is fraud an essential part of that system?)

[aminam]

Rather, the most important question is: Has the dollar become dependent on the economies of the world as a whole, since it represents the global financial system? Is there someone who makes profits on behalf of others? Is there manipulation and fraud? Are there parasites that live on human tragedies? Why not build a new global financial system that all countries of the world agree on?

[aminam]

I noticed that there is something ugly and stupid that attracts monkeys to each other, and that thing exists among other types of irrational animals.
I am pretty sure about that (100 % correct).

[chrisstory]

Economics divorced from political economy, has little social utility. It coordinates the behavior of politically conservative actors, so to critique it for being empirically mistaken is absurd.