Discussing Minsky & Jubilee with Alpha to Omega

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The “From Alpha to Omega” podcast recorded the following interview with me about the “Modern Debt Jubilee”. We discuss a lot more than just that–starting with why people who are interested in Hyman Minsky’s work should NOT read Stabilizing an Unstable Economy, but should instead start with either John Maynard Keynes or Can “It” Happen Again?

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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19 Responses to Discussing Minsky & Jubilee with Alpha to Omega

  1. Tadit Anderson says:

    Steve, your approach seems to more and more be stated as a history of ideas. This combined with the mathematical modeling/analytics is a pretty powerful combination, and has generally been exiled from the profession. The idea of Jevon’s Paradox I believe to be largely just another neo-classical scary bedtime story, ie. there is no monster under the bed that disappears when you are looking it. It ends up, imo, much like the Laffer curve as in positing selective behaviors which dissolves into pixie dust on close inspection. To retreat into “resistance is futile” seems like a cheap bit of public cognitive dissonance to support faith based economics. And what is your epithet for the null hypothesis and falsifiability as scientific fictions and herd/panic-ed level of social variables? Thumbs up for the Graeber mention. Tadit

  2. David Collyer says:

    Excellent discussion. A Debt Jubilee beats debt deflation hands down. Steve, you suggest 50% of GDP as scale, or around $30k per person. This is the first time I have seen you put a figure to it (I may not be listening closely enough). That’s roughly the asset base of one of our big 4 banks. Ireland has spent 14k Euro pp bailing their banks – an utterly fruitless gesture – which is of similar scale.

  3. koonyeow says:

    Title: koonyeow is Steve’s Obedient Student

  4. It seems to me that a good alternative to Jubilee would be Gedellian negative interest stamp currency.

    For example, graduates in the US are burdened with $1 T in student loan debt and this debt is depressing the housing market. At the same time, the US Treasury has $16 T in public debt. It seems obvious to me that the Treasury ought to print up, WITHOUT BORROWING, $1 T in $10 denomination stamp money, and simply mail it to the student debtors. The stamp money would depreciate at 1% per month unless kept current by affixing a 10 cent stamp to the the back of the bill. The student loan creditors, on receiving the stamp money would spend it as fast as possible on employee age, rents, and whatever commodities they could lay their hands on as fast as possible, to avoid getting stuck with the stamp fee. The stamps would return to the Treasury $10 B per month. which is nothing to sneeze at, and after 100 months would allow the Treasury to reduce its debt by $1 T.

    The rapid circulation would not cause prices to rise because the overall effect of the stamp money is deflationary. The Treasury might even consider printing up stamp money for credit card debt, home mortgages and whatever. The faster they print the stuff up, the more Treasury debt gets paid off.

    While the proposal would probably be not do-able because the banking interest control all the politics but it does seem that the idea deserves serious discussion.

  5. I meant “Gesellian” as in Silvio Gesell.

  6. impermanence says:

    How about if you just make people and institutions responsible for their actions instead of like spoiled rotten four-year-olds?

  7. LCTesla says:

    Two places you were mentioned recently, Steve:


    On another note entirely, might it be worth making a blogpost on the argument as to why debt-to-GDP ratios are a more important indicator of the burden of debt than interest payments on existing debt? Why is this graph not an argument as to the deleveraging process in the US having largely been successful already: http://research.stlouisfed.org/fred2/data/TDSP_Max_630_378.png

    I bet this is on quite a few of your readers’ minds.

  8. Steve Hummel says:

    Interesting twitter discussion about a priori versus mathematical economic analysis. Of course if we just realized that the both/and synthesis perspective is the answer we could effectively incorporate Both mathematics as a means of sensing instabilities in particular ares of the economy AND wisdom/philosophy/spirituality as the appropriate basis for general economic and monetary policy. That way you’re able to utilize and align both of these most powerful “tools” of the both/and reality of Life (inner) and Living (outer)……while simultaneously recognizing the power of each as well as honoring their mutual relevance.

  9. Steve Hummel says:

    Also, if we recognize the relevance and power of wisdom it might make economic change a lot easier because economics will then finally be able to do away with BOTH its incestuous relationship with wealth and power, AND its single eyed attachment to orthodoxy.

  10. TruthIsThereIsNoTruth says:

    Has anyone seen inside the subscription version of this blog? With the drop in both blogging and comment activity in the free version has it just shifted to the non-gratis version?

  11. Derek R says:

    I have. It’s quite quiet too. I wouldn’t say that the activity has shifted. There’s still more commenting going on at http://www.debtdeflation.com at any rate. Steve has posted a few nice articles and podcasts on http://www.debunkingeconomics.com but my guess is that the low activity level on both blogs has a lot more to do with his NZ trip and his daily workload than with anything else. I am sure that activity will pick up now that he’s back in Oz.

  12. Ed Beaugard says:

    Hi Steve,

    Really enjoyed the discussion here, I wish I had the time to read Minsky!
    Sorry to be such a scold/nag, but I was wondering if you’ve considered the work of Bjorn Lomborg on the response to global warming? I’d be interested to hear what you think of it.
    Also, is it really plausible that the earth’s surface temperature would be the same as the sun’s? It doesn’t seem to be plausible to me, and would this suggest that the application of thermodynamics in this way might be unhelpful?
    One worrying thing about alternative economics, INET and such, is the application of ideas from biology to economics, also complexity and chaos theory
    which, in my view, are misguided.

    Ed B.

  13. unclepete says:

    Ed B. Re global warming,it’s simply the physics . Start reading (Sceptical science or real climate are both great resources) Lomborg is wrong. The choice is simple, if we want to maintain our current lifestyle (ie energy consumption) and we do not want to cook the biosphere then we have to replace all coal and gas burning power plants with nuclear. France has done it , it is possible.
    PS: Not one person died in Fukushima from radiation, however 20 000 people perished in the tsunami.

  14. Steve Keen says:

    No, I’ve just been too busy to follow comments myself, or to post a great deal. There are blog comments on the paid site as well, but not as many as here as yet.

  15. Steve Keen says:

    Spot on Derek!

    Though how long I’ll be in Australia is a moot point. I’ve made 2 trips to NZ in two weeks, and while walking out of the Customs area on the second one I got a call from the World Council of Churches asking me to take part in s strategic planning conference for the churches on how to respond to the economics crisis. That necessitates a flight to Brazil in October, one day after I get back from the USA! And I’m speaking at the University of Mexico at the end of the month.

    I can’t keep this pace up, and of course posting has suffered.

  16. Steve Keen says:

    Hi Ed,

    Of course it’s not feasible that the Earth’s temperature will be the same as the Sun’s–because long before we reach that point, our current trajectory of energy use would have caused ecological breakdown.

    However it is categorically correct that if the current rate of growth of energy use was sustained, then that would be the result in the relatively near future. Here’s the relevant extract from that blog:

    At that 2.3% growth rate, we would be using energy at a rate corresponding to the total solar input striking Earth in a little over 400 years. We would consume something comparable to the entire sun in 1400 years from now. By 2500 years, we would use energy at the rate of the entire Milky Way galaxy—100 billion stars! I think you can see the absurdity of continued energy growth. 2500 years is not that long, from a historical perspective. We know what we were doing 2500 years ago. I think I know what we’re not going to be doing 2500 years hence.

    I suggest you check it out:


  17. al49er says:

    Would you recommend a similar subscription if it were “The Australian” Steve?

  18. Steve Hummel says:

    Glad to hear you are going to address the World Council of Churches. They need to be out front LEADING instead of accepting the compartmentalized irrelevance the current status quo pushes them into. A values synthesis of economics, money systems and human wisdom is as necessary as a scientific approach to same. Money is basically accountancy. Thus the science of accounting is the way to harness Mammon. And if accountancy does not allow for a truly free, free market then wisdom i.e. Grace as an economic and monetary policy is necessary to have such. Of course Science and mathematics should necessarily be utilized to help us know when particular aspects of the economy are tending toward imbalance.

    I would suggest that the World Council should DEMAND a world wide convention to examine the differences between stated and actual ideals, values and purposes of the world/individual nation’s economies……and then once again, LEAD by DEMANDING that such be aligned and bound back to human wisdom. Boldly synthesizing economics and money systems with wisdom, and wielding the tools of science and math as additional disciplines in that project is the way to direct Leviathan. The churches, as spiritual leaders, not dogmatic dinosaurs, need to get out front and be much more visible with this idea.

  19. Derek R says:

    Well, take care. I understand why you’re working so hard and I don’t want to sound like your mother but at the work rate you’re currently putting yourself through, you absolutely must ensure as much good quality sleep as you can.

    Anyway, best of luck with your upcoming trips.

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