Manchester University Post Crash Economics Society

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Last week I visited the students who have started the Post Crash Economics Society at Manchester University, and took part in a debate on the topic of “Should (and could) economics have predicted the economic crisis?” with Peter Backus. The society will release a video of the talk at some point, but in the meantime here is my presentation.

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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8 Responses to Manchester University Post Crash Economics Society

  1. Steve Hummel says:

    I’m in complete agreement with endogenous money, basic economic disequilibrium and austerity being an irrational conflation of INDIVIDUAL VIRTUES with SYSTEMIC PROBLEMS. However, Keynesian, new Keynesian, MMT, velocity theory riddled by numerous factors overwhelming its alleged effects et are all at best merely palliative non-solutions to the problem which is that the system cannot possibly generate enough in individual incomes to approximate systemic equilibrium…including all manner of commercial/financial stimulus….without the continual acceleration/build up of debt….which you, Dr. Keen, have also correctly identified as the sign of impending recession/depression. The ONLY ACTUAL solution is a DIRECT supplement to individuals and the adult, responsible and actual control of the money system/economy with the macro-economic mathematical/virtual equating of the costs of consumption and production for a prescribed period of time. Furthermore, this is the ONLY ACTUAL solution that places the individual in control of the economy with his/her adequate purchasing power money-vote, instead of a self interested financial, political or corporate elite.

    So are economists as the decipherers of what ought to be policy going to have the guts and the good sense to confront this truth, or are they going to hide behind their overly cautious, mentally fragmented, scientific and dubious claims of objectivity and allow the elites to enforce stagnation at best AND THEIR CONTINUED DOMINATION AND “CONTROL” OF THE SYSTEM on us all for 20 or 30 years…..while technological innovation accelerates a pace so that at best stagnation is permanent?

    It’s a freedom versus enslavement/domination issue. Make no mistake about it. It’s time to stop shrinking from that fact.

  2. Steve Hummel says:

    What if we crafted a system whose policies accurately reflected both our competitive and our more spiritual natures? What if we graciously embraced the abundance that technological innovation has enabled instead of hoarded, squandered or denied it to each other? What if we enabled everyone to have the assurances of a life which does not require that their primary purpose and compelled focus is economic security? Most of the individuals who contributed the most artistically, scientifically and even economically had just that kind of assurance. What if we granted economic security? Would the people in general feel an obligation to return that generosity by being more productive, constructive and more creative individuals? What if the real reason why only 90% of individuals are productive, constructive and creative is because the system enforces an onerous, rigged and dominating system on them? What if 95+% of us are actually basically good and just held back by a system we secretly resent, despise and know isn’t fair? What if we make the system and its policies come up to our already evolved capabilities instead of enduring one that thwarts those very natural tendencies? What if?

  3. Steve Hummel says:

    A Distributive monetary paradigm makes money more easily available and makes everyone more secure, and a general retail discount eliminates any inflation that might, emphasis might result. Don’t let anyone bamboozle you…the actual solutions to our situation are really quite simple. GIVE INDIVIDUALS a DIRECT supplementary income whether they work or not, and have retailers discount their prices to the individual while having their discounts rebated back to them so they remain whole on their margins and overhead, and have a countervailing credit creating agency distribute those monies based on monthly imminently decipherable statistics. Those two policies enacted solve the real systemic problem and empower the individual . Time to evolve the system up to the whole of our natures instead of only half of it. Time to have the best of both a profit making and a humane system. Time create a society and culture that we can all be proud of, and all be more constructive, productive and creative in creating, experiencing…and partaking of.

  4. Steve Hummel says:

    Also posted to Ellen Brown’s web of debt google group:

    The FED needs a countervailing credit creating agency that not only will provide private banking with a competitive commercial counterpart, but also one that provides a symmetrical and individual empowering new form of consumer credit issuance, namely the monetary Gift. Since its formulation/concoction velocity theory has been flawed/incorrect and has not enabled a stable economic system. There is a “laundry list” of factors which have further contributed to even that flawed/incorrectness, and the perfectly acceptable factors of a profit making economic system wed to an increasing acceleration of technological innovation have already made velocity completely inadequate….and will never enable it to “work” again. Never. You will not, and should not put profit and innovation “back in the bottle.” The only, that’s the ONLY way and the easiest and most effective way to resolve this impasse is to utilize the perfect tool for doing so….money, in such a way that it guarantees enough individual purchasing power to both set individuals economically free and make the economy function at the wealth level its advanced technological level is capable of. Mandating a dividend and a general retail discount as policies are the most effective two means of economic democracy. It enables not only our modern economic and monetary system to function properly, it enables the best of both capitalism and socialism that is profit, free enterprise, private property AND a humane and forward looking future. It encourages increased innovation while severing the too long and obsolete trade off of employment versus technological advance. It will in fact enable and encourage the re-industrialization of the advanced economies by cutting that “Gordian knot.” It is a true synthesis and truly a new paradigm.

  5. TruthIsThereIsNoTruth says:

    Q: What if we crafted a sys­tem whose poli­cies accu­rately reflected both our com­pet­i­tive and our more spir­i­tual natures?

    A: You could do that by starting your own blog.

    Q: What if we gra­ciously embraced the abun­dance that tech­no­log­i­cal inno­va­tion has enabled instead of hoarded, squan­dered or denied it to each other?

    A: As perfectly examplied by you by taking a free ride to flog your own ideas unrelated to the blog topics. That’s embracing technological innovation Steve Hummel style.

  6. Steve Hummel says:

    The relationship between total individual incomes (labor costs) and total prices (total costs) is a macroeconomic one. Seeings how the aforementioned relationship is the basic definition of consumer finance and consumer macroeconomics, is the very nexus of micro and macroeconomics itself, is where the distribution problem of modern technologically advanced and abundantly productively capable economies actually lies and last but not least is also the nexus between not just the economy and businesses, but the economy and the individual….and the blog is about macroeconomics and macroeconomic theory….I’d say it was always and completely relevant.

    Considering that the above relationship is mostly ignored and non-comprehended due largely to ignorance (no accounting education in economic curricula which is a point made by Dr. Keen himself) , intellectual fragmentation (the opposite of the integration which is the process of Wisdom itself) and the all too modern psychological tendency to forget/neglect and even negate individual self awareness….I’d say it was educationally, mentally and spiritually (as opposed to religiously) relevant as well.

    Just another freely offered tidbit from the intellectually curious former owner/operator of a residential window cleaning business. Ta ta.

  7. Steve Hummel says:

    From Ellen Brown’s blog: Regarding science and the scientific method: Indeed deduction IS what the scientific method is. What we need, however, is the integration of BOTH deduction AND induction….which is the hallmark of scientific breakthrough. Seeing that there is a symmetry (reflection) and philosophical alignment between traditionally internal/religious/psychological experiences and the temporal policies and policy solutions to our economic, financial and monetary problems (the natural experience of Grace and monetary grace,….grace being the experience and awareness of abundance and the freedom thereof) …is precisely that kind of integrative insight. After all, the Scientific method and the sciences in general have their own problems with orthodoxy as well as bias from numerous directions.

  8. Steve Hummel says:

    Also posted to Ellen Brown’s and Real World Economic Review blog:

    Dave,

    Actually I agree with you that the Pope is closer to the truth and the solution than most economists.

    It’s actually quite simple. Give the individual money. GIVE, as in monetary Grace. Not a counterfeit grace as in re-distribution, but actual giving. This brings economics and the money system full circle back to humanity and humaneness and common and good sense.

    Velocity theory which is the basic assumption that purchasing power can be increased simply by re-circulating within the economy has always far overestimated the actual amount of money that actually re-circulated, how much of what might actually do so is able to once again become individual income and how the advance of technology and technological innovation has and increasingly will reduce the rational need for jobs, the number of actual jobs relative to the population and to the wealth and productive capability of the society, and to the wage rate due to wage arbitrage. So velocity has always been poorly/incompletely defined, has never been an effective monetary solution anyway, and is actually currently completely unable to effect economic and monetary stability. And, because profit making economic systems are not going to disappear (short of some completely vulgar and/or reactionary episode of history that is even more oppressive than the current suave and hypnotic “free” market system) and because it is completely irrational to stop or thwart innovation…..ACTUAL individual monetary Grace is necessary.

    Furthermore, it is necessary to de-centralize and democratize the economic and monetary systems, and this is best and most completely accomplished by implementing policy…that accurately and actually reflects Grace…the free gift. That would be a universal dividend DIRECTLY DISTRIBUTED, NOT RE-distributed. Then, because Life is an adventure that cannot be completely or priorly perceived, because the economic/productive system is so completely intertwined with the money system, because the current conventions of cost accounting are flawed (they correctly credit businesses with capital appreciation, but fail to do the same for the individual…while all of the above flawed and increasingly irrelevant theory goes unexamined/uncomprehended) and thus the entire system cries out for actual ADULT control with effective policies like the above and the proceeding….a general retail discount to consumers (an already widely used and unobtrusive mechanism that in no way interferes with price discovery but DOES increase competition) that is rebated back to participating merchants and is based on imminently accessible periodic statistics and a simple mathematically equalizing formula….is the intelligent and wise economic thing to also do.

    Yes, the above is a complex paragraph, but…if you are an economist, if you keep re-reading and contemplating it with the intention of understanding and don’t lose your focus or resort to mere economic “Wisdom” ….you may awaken to its actually basic, simple and elegant nature…despite your economic “education”.

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