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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