Ep. 294 Steve Keen on What’s Wrong With Neoclassical Economics
Steve Keen joins Bob to commiserate on the poverty of Paul Krugman, and to make the case for Hyman Minksy. An all around fun, informative conversation.
Mentioned in the Episode and Other Links of Interest:
- The YouTube version of this interview.
- Steve Keen’s substack and Patreon.
- Steve Keen’s Debunking Economics podcast.
- Bob’s recent appearance on the Steve Keen & Friends podcast.
- Gene Callahan and Bob Murphy review of Keen’s Debunking Economics.
- Bob’s article on Paul Samuelson’s “A Summing Up” (from the Cambridge Capital Controversy).
- Bob’s article on Eugene Fama on the housing bubble.
- Bob’s critique of Nordhaus’ DICE model.
- Help support the Bob Murphy Show.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
I don’t know what is more dangerous, trusting climate change computer models or trusting the assumptions of neoclassical economics.
Are there any economists calling themselves the “Neoclassical School” ?
Same with “Neoliberal” … it’s a nonsense word used to create strawman arguments.
Tel, I think there might be economists who would say “Sure I’m a neoclassical economist.”
Hegemonic schools of thought tend not to acknowledge that there are other schools of thought, which is part of what makes them so insidious. Besides, plenty of economists have and still do identify as neoclassical.
This guy went way off base at the end. Sheesh.
Great episode but the audio quality was terrible. I could barely understand what Steve was saying.
Yeah sorry about that, the YouTube version’s audio is a bit better:
https://www.youtube.com/watch?v=WSym7cIIv18&feature=youtu.be
Listening to this right now, and I’m noticing a possible issue at around 58:00 or so: Keen is mixing equity (dollars) with deficits (dollars/time) and this is a unit mismatch.
In his model, there does need to be a government *debt* but not a *deficit*. Once the government has a little bit of debt, the banks and non-bank private sector can both have positive equity, and simple deflation from the same money chasing more goods (due to increases in productivity) can increase the equity of both sectors in real terms.
Haven’t finished the episode, so maybe you address this in there, but I wanted to throw it out there before I forgot.