Kick­start Min­sky Now!

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Minsky: Stability is Destabilizing

The Kick­starter cam­paign to raise funds to fur­ther develop “Min­sky”, my dynamic mon­e­tary sim­u­la­tion pro­gram, has been launched. The imme­di­ate objec­tive is to raise $50,000, which will enable the cur­rent ver­sion of Min­sky to be com­pleted. The ulti­mate goal is to raise $1 mil­lion or more to fully develop the con­cept.

Click here for the Kick­starter cam­paign. If you have appre­ci­ated my work over the last seven years to warn about the eco­nomic cri­sis, to develop an approach to macro­eco­nom­ics that can under­stand why it hap­pened, and to develop poli­cies that might help end it, the please show this by mak­ing a pledge.

Let your net­work know about it too. The more peo­ple who kick in, the bet­ter.

Some key facts about Kick­starter cam­paigns:

  • They run only for a set num­ber of days: this cam­paign will end on March 18. If you don’t give by then, you can’t give later. So if you want to help, pledge now.
  • Pledg­ing early is a very good idea. The faster a project reaches its tar­get, gen­er­ally the more it raises–there is a “band­wagon” effect amongst Kick­starters. Also, a fast-ris­ing project tends to get selected by Kick­starter staff as a “Staff Pick”. That gives it more pub­lic­ity and raises yet more funds.
  • Pledg­ing is easy. You choose the amount you want to pledge and click. That takes you to an Ama­zon page where, if you’ve ever bought any­thing from them before­hand, you already have an account. Con­firm the pledge there, and that’s it. If the project gets its tar­get amount of money or more, then at the end of the cam­paign (some time around March 20) the amount you pledge will be trans­ferred to the Min­sky project by Ama­zon (minus about 10% rep­re­sent­ing Ama­zon and Kickstarter’s fees).

I have great hopes for this pro­gram. As a teach­ing tool, I hope it will excite young econ­o­mists and entice them away from the sta­tic, equi­lib­rium-fix­ated, barter model they are cur­rently taught in Uni­ver­si­ties around the world. As a research tool, I hope it will develop in the same way that Lorenz’s model of fluid dynam­ics did, from a “toy” model to the basis of mod­ern weather fore­cast­ing. The eco­nom­ics could never be fore­cast as the weather is, obvi­ously. But explic­itly acknowl­edg­ing the com­plex, mon­e­tary, non-equi­lib­rium nature of the econ­omy has to make for a bet­ter eco­nom­ics.

Help me real­ize those hopes by pro­vid­ing the fund­ing needed to take the pro­gram to its full poten­tial. Kick­start Min­sky Now!

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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  • @ Pro­fes­sor Keen (above)

    You state: “The eco­nom­ics could never be fore­cast as the weather is, obvi­ously.”

    Again you are so wrong, for the pre­dic­tions of fore­cast in Eco­nom­ics is pre­cisely the same as they are for weather. Same and iden­ti­cal prob­lems actu­ally: pre­sen­ta­tion focused on “enter­tain­ment value”; pro­tec­tion of the insti­tu­tional priest­hood, a pri­ori; pref­er­ence for medi­oc­rity, dogma and snivel­ing con­sen­su­al­ism in the roll-the-eyes col­lec­tivist “faith based hier­ar­chi­cal tenure model”. 

    Please con­sider that thee are three large weather fore­cast­ing endeav­ors in the World: 1. UK, 2. France and 3. Geneva. Yep, all three are staffed with blood suck­ing hier­ar­chi­cal bureau­crats that drib­ble on about sci­ence, with­out the sci­ence, in fact. Algo­rithms, codex, sta­tis­tics, etc., (to impress the politi­cians) but in the end, it is all just plain guess work and ill-founded opin­ion.

    Yep, just like Eco­nom­ics.

    It is IMPOSSIBLE for any insti­tu­tion, even the above, to pre­dict over time, the weather 24 hours in advance with a 57.5% prob­a­bil­ity of accu­racy.

    And, this is with bil­lions of dol­lars employed in super-com­put­ers, in each orga­ni­za­tion, that in the main, load actual sta­tis­ti­cal accounts of past weather con­di­tions in their on-line Libraries. For their God­head proph­e­sies, com­puter pro­grams actu­ally just com­pare the stored known past events with cur­rent events, never look out a win­dow, and sell their com­par­a­tive guesses to other insti­tu­tion­ally obe­di­ent and blind suck­ers for them to pedal.

    So, au con­traire, Eco­nom­ics pre­dic­tions are exactly as weather pre­dic­tions, which should be replaced in both cases, by just look­ing out the win­dow and being rea­son­ably aware and well read. 

    ???? — ????

  • Bhaskara II


    Some weather report­ing and pre­dic­tions can be very good! Very good. Over a few days to a lesser degree a week. Check out some of the bet­ter weather web sites with the most infor­ma­tion includ­ing satel­lite pic­tures, radar, weather maps with wind speeds and direc­tions, tem­per­a­tures, pres­sures, mois­ture and com­puter mod­els with real input. I have been amazed. Learn the sym­bols on the map. 

    I chal­lenge you if you find such a thing for your area to keep log of the pre­dic­tions and what you encounter out­side. If you are for­tu­nate to have mod­ern weather info you might be pleased. Just print up the report and pre­dic­tions daily or save the web page and check off a match of the actual weather and log the devi­a­tions. I have have been pleased with the accu­racy. Now if some one tells me its gonna rain tomor­row it usu­ally does almost with out fail. 

    Don’t let econ­o­mists and the sorry state of eco­nom­ics give mod­ern weather reports and fore­casts a bad name!

  • TruthIs­ThereIs­NoTruth

    pjb, sorry but by say­ing things like the weather 24 hours in advance with a 57.5% prob­a­bil­ity of accu­racy, you’re a pot point­ing out the ket­tles soot marks…

    How could you pos­si­bly get such an accu­rate sta­tis­tic (implictly to 1dp%). Even if some phd went and did a study, it would be no more than some sam­ple with a myr­iad of assump­tions and def­i­n­i­tions to arrive at what in the end is an arbi­trary num­ber.

    But you do point out some­thing impor­tant. Given what is hap­pen­ing with the cli­mate and the impact it can have on the wel­fare of human beings, mete­o­rol­ogy is one of the most impor­tant fields of study with respect to improv­ing human wel­fare. But as is human, indi­vid­u­als will drive out their newly washed car into the rain and blame the weath­er­man for not “pre­dict­ing” it.

    There is a great par­al­lel to eco­nom­ics here. It is not the pre­dic­tion on the direc­tion of asset prices to ben­e­fit wealthy investors what eco­nom­ics is about. This is a pub­lic per­cep­tion dri­ven by the media, reflect­ing noth­ing more than human greed man­i­fested in hunger for know­ing where to best put their finan­cial bets to increase wealth.

  • pfitzsim­mons

    I live in Mass­a­chu­setts, USA where we were just hit with the worst snow storm in 34 years. The National Weather Ser­vice pre­dicted all the storms major para­me­ters (Area, snow­fall, dura­tion, arrival time, tem­per­a­tures) with great accu­racy allow­ing the State and cities to pre­pare in advance. The warn­ing surely saved lives as well as money. The storm was not easy to fore­see. It con­sisted of two inde­pen­dent weather events con­verg­ing at the same time and place. Thirty-four years ago a sim­i­lar storm shut the state down for a week with enor­mous losses to the State and pri­vate busi­nesses when many thou­sands of aban­doned cars clogged streets for days.

  • tcgib­ian

    I hate to be the spoiler in this con­ver­sa­tion, but as I under­stand it, Min­sky is an eco­nomic model, not a cli­ma­to­log­i­cal one. 

    As a model, it will prove itself by its abil­ity to explain past eco­nomic events and pre­dict future ones. Clearly Neo­clas­si­cal eco­nom­ics has failed in both these par­tic­u­lars. Steve Keen’s work has been the best approach so far to break­ing out of the medieval mind­set which com­mands the stage now.

    Well worth the con­tri­bu­tion.

  • TruthIs­ThereIs­NoTruth

    Is Min­sky a model or a frame­work for cre­at­ing dynamic mod­els?

  • Derek R

    In the con­text of the Kick­Starter, Min­sky is a pro­gram for cre­at­ing dynamic eco­nomic mod­els just as Excel is a pro­gram for cre­at­ing spread­sheets. How­ever in the wider con­text of eco­nomic his­tory it is the eco­nomic model devel­oped by Hyman Min­sky to explain busi­ness cycles.

    So the answer to TITINT’s ques­tion is “both”. In fact it is pos­si­ble to use the Min­sky pro­gram to cre­ate instances of the Min­sky model.

  • Lyon­wiss

    Weather fore­cast­ing and eco­nomic fore­cast­ing have com­pletely dif­fer­ent types of insur­mount­able hur­dles.

    Weather fore­cast­ing is based on proven laws of physics, ther­mo­dy­nam­ics, hydro­dy­nam­ics, fluid mechan­ics of tur­bu­lence etc. The equa­tions are deter­min­is­tic, which should have deter­min­is­tic solu­tions, but do not, because the dynam­ics is unsta­ble, sto­chas­tic or sen­si­tive to ini­tial con­di­tions, as dis­cov­ered by Lorenz. The source of intrin­sic sto­chas­tic­ity is non­lin­ear inter­ac­tions, lead­ing to deter­min­is­tic equa­tions with chaotic solu­tions and hence long-term fore­casts are impos­si­ble. Short-term weather fore­casts may be OK. Cli­mate mod­els for long-term fore­casts are snake-oil, par­tic­u­larly if over-sold.

    Eco­nomic fore­casts are pure snake-oil, because there are no proven laws of eco­nom­ics. The only exact equa­tions in eco­nom­ics are account­ing iden­ti­ties. All so-called laws of eco­nom­ics are noth­ing more than hypothe­ses and assump­tions, with­out empir­i­cal valid­ity. The Phillips Curve, for exam­ple, has dri­ven eco­nom­ics research for decades, is an empir­i­cal arte­fact, sta­tis­ti­cally insignif­i­cant, and repeat­edly fal­si­fied in other datasets.

    All eco­nomic mod­els include merely unproven hypothe­ses, such as Phillips Curve, to drive changes in the econ­omy, much like the laws of motion in physics. The equa­tions which deter­mine eco­nomic fore­casts are fan­tasies and there­fore in rela­tion to real­ity, they pro­duce ran­dom-walk results. Hence even short-term eco­nomic fore­casts are pathetic (eg the sur­prise neg­a­tive GDP of the US in the last quar­ter). Long-term eco­nomic fore­casts are impos­si­ble for other rea­sons I’m going to write about.

    Instead of build­ing a crys­tal ball, it would be bet­ter to prove Minsky’s the­ory of insta­bil­ity by devel­op­ing quan­ti­ta­tive rela­tion­ships, which are empir­i­cally ver­i­fied. This is, at least, an essen­tial first step in a Min­sky macro­eco­nomic model. More sophis­ti­cated equa­tions and infra­struc­ture are not the answer; cor­rect equa­tions which cap­ture real eco­nom­ics are. Past and present efforts in eco­nom­ics research have been an enor­mous waste of resources.

  • @Lyonwiss Feb­ru­ary 11, 2013 at 1:47 pm | #

    Past and present efforts in eco­nom­ics research have been an enor­mous waste of resources.”

    It appears to me that the whole “Insti­tu­tional Eco­nom­ics Endeav­our” has been an enor­mous mis­guided adven­ture in build­ing the most ludi­crous insti­tu­tional reli­gion that civ­i­liza­tion has ever yet imposed on human­ity; an impo­si­tion with unde­fin­able cost burns includ­ing the suf­fer­ing of unnec­es­sary human hurts and pain; war and geno­cide and more; and which have sub­verted the life course processes for the respect of intel­lect, sci­ence, innate intel­li­gence and that chose a paper fiat as its God to be held on high, or else! All for the sake of the arro­gance of an elite and their pri­or­ity claim to grande igno­rance — as the King of Kings for all Mankind.

    Yes, Weather The­ory makes an attempt at uti­liz­ing some sci­ence despite the sto­chas­tic nature of its con­text. But not Eco­nom­ics, you either Believe (Oh Lordy) or are burned at the stake as a Heretic.

    Bot­tom line: It’s all witch doc­tor stuff and more mumbo jumbo equa­tions built by the blind, mas­tur­bat­ing an ele­phant will not improve any­thing much at all, au con­traire, but, after all, who cares? Only Econ­o­mists.

    Ho hum

  • Cor­rec­tion:

    The above should read as:

    Yes, Weather The­ory makes an attempt at uti­liz­ing some sci­ence despite the sto­chas­tic nature and other assump­tions of insta­bil­i­ties, of its domain.


  • Is any­body buy­ing Gold or Sil­ver now? I wish to pro­tect against all the fiat currency’s depre­ci­a­tion in value? I wish to set aside some money/purchasing power for my retire­ment in 30+ years and I am look­ing for ideas to pre­vent infla­tion steal­ing my hard earned money over the long term. Any com­ments are wel­come? Does Steve have any ideas on this?

  • Eliot Clarke

    Seems like Noa­hopin­ion has finally posted about Minksy, deep in a post about how busi­ness cycles don’t seem to be cycles at all. Over­all he seems to have been pretty civil about the Min­sky tool, maybe the twit­ter exchange focused his mind, what­ever.

    I would be inter­ested on your analy­sis of the dri­vel from Lucas quoted within the arti­cle. And have you seen/heard of this Hid­den semi-Markov model he’s bang­ing on about?

    I don’t read Noa­hopin­ion reg­u­larly because I find his style of deli­brate con­tra­dic­tion quite annoy­ing and he builds straw­man argu­ments like the best of the neo-lib trolls. He does how­ever occa­sion­ally peak my inter­est with the scope of his posts, but still, I imag­ine he would be an incred­i­bly irri­tat­ing human­iod to meet in real life. 

    Hope theres some light at the end of the tun­nel with the whole UWS deba­cle.

  • Steve Hum­mel

    Eco­nom­ics and soci­ety will never end “the busi­ness cycle” until the idea of indi­vid­ual mon­e­tary Grace is embraced. The rela­tion­ships between the accu­mu­la­tion of tech­no­log­i­cal progress, Finance’s depen­dence on the same for their power and profit, Finance’s monop­oly on credit cre­ation, the con­ven­tions of cost account­ing and the inevitable reduc­tion of indi­vid­ual demand occur­ring in profit mak­ing sys­tems from all of these.…must be looked at.

  • Steve Hum­mel

    Wis­dom is eth­i­cal chaos the­ory.

    Math­e­mat­ics shall not cease from explo­ration
    And the end of all its explor­ing
    Will be to arrive where it started
    And know the place for the first time.

  • Steve Hum­mel

    Wis­dom is the higher order level of think­ing (phi­los­o­phy) and act­ing (pol­icy) that inte­grates every mind it touches and every sys­tem it is applied to.

    We need that of course. But what we need even more are the most uni­ver­sal and pow­er­ful dis­til­la­tions of that Wis­dom. I would assert that these are the nat­ural ideas, val­ues, pur­poses and espe­cially the experiences/policies of:

    Faith as in Con­fi­dence
    Love and
    A strong sense of Grace

    These are sketched out in my primer on them in regard to our money sys­tem and cur­rent finan­cial cri­sis here:

    This from the Intro­duc­tion of another book I am writ­ing enti­tled:

    Sys­tems, Sym­me­try and Walk­ing Sapi­ence

    It is a two pole cos­mos where the only thing more impor­tant to under­stand than the neces­sity of bal­ance and sym­me­try in both poles is….honoring the essen­tial hier­ar­chy of impor­tance of one pole over the other. Yes, it is a funny world….but a poten­tially glo­ri­ous one also.

    Faith as in Con­fi­dence, Hope, Love and a strong sense of Grace are what is required for a healthy and capa­ble Human­ity. With­out these dis­til­la­tions of Human Wis­dom Man with­ers, dithers and devolves into homo eco­nom­i­cus or some other stu­pid­ity or flaw. It is time to remem­ber who and what we are and cul­ti­vate that instead of, and in addi­tion to the other things we must be while we are here.

    Eco­nom­ics and most of Moder­nity are out of synch with human­ity. Pre-mod­ern, pre-sci­en­tific human­ity had a faith with which it could gen­er­ate con­fi­dence and hope both in this life and the next. Today we have nei­ther. We have nei­ther an eco­nomic sys­tem which is sta­ble, securely able to pro­vide well for the major­ity of indi­vid­u­als, nor enables us to have the time to ade­quately con­tem­plate our exis­tence, and mod­ern life increas­ingly rarely rec­og­nizes that such an action is even of real value. We live in a spir­i­tu­ally de-nuded and thus indi­vid­u­ally impo­tent world that is also more often than not, intel­lec­tu­ally and sci­en­tif­i­cally arro­gant and igno­rant.

    It is time for sym­me­try between the best of Man and his sys­tems, most espe­cially his eco­nomic, finan­cial and mon­e­tary ones. This align­ment of ideas, val­ues, pur­poses and expe­ri­ences is urgently nec­es­sary, and the only truly ratio­nal and humane course if we are to avoid the social chaos, con­flict and death of inno­cents that con­verg­ing crises will bring if we don’t.

    This is no mere moral­is­tic or dog­matic call for every­one to behave bet­ter or to believe in a cer­tain reli­gious way. It is a call to re-craft our sys­tems so that their poli­cies hon­estly reflect the dis­til­la­tions of Wis­dom in order to enable a walk­ing sapi­ence that raises the qual­ity of every­day life to new and bet­ter lev­els. This Wis­dom can inte­grate each and every sci­en­tific, intel­lec­tual and artis­tic dis­ci­pline enabling their pol­icy effects to ulti­mately reflect the Wis­dom of Con­fi­dence, Hope, Love and Grace and so aid every Man and Woman in their per­sonal respon­si­bil­ity of self devel­op­ment as well.

  • Robert K

    Hello Kalman;
    What­ever opin­ions Steve may hold on the sub­ject of cur­ren­cies, in their store of
    value func­tion (or lack thereof) he does not express them on this blog. I’m sure,
    as a long­time reader of this blog, you know what Steve’s pri­mary areas of inter­est
    are. If you hap­pen to be inter­ested in the sub­ject of gold (but not sil­ver) in their
    present and future roles as media for the preser­va­tion of pur­chas­ing power over
    time, you can do no bet­ter than to go to the blog FOFOA, and read a post enti­tled
    “mon­ey­ness”. Good luck, it’s a long slog but worth the effort. Cheers.

  • Thanks Eliot,

    It’s get­ting closer (the UWS light that is).

    I have read some of that lit­er­a­ture; as usual it’s a way of impos­ing appar­ent ape­ri­odic cycli­cal­ity on an equi­lib­rium model.