There has to be a bet­ter way

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Note: This was published as my last column on Business Spectator on April 6th, but it’s now gone missing after News Ltd merged BS with its own in-house stable and changed all the URLs. Given the election and Elizabeth Farrelly’s excellent thought piece in the Sydney Morning Herald “The great tragedy of Malcolm Turnbull”, I thought it was a good time to revive it.

One of the dis­ad­van­tages of grow­ing up is find­ing in your old age that peo­ple you never took seri­ously in your youth are now run­ning your coun­try.

In my per­sonal case, I’m speak­ing about Tony Abbott and Mal­colm Turnbull—but if I’d gone to Uni­ver­sity at the same time and place as Kevin Rudd, I’m sure I’d be speak­ing about him too.

I knew Abbott and Turn­bull in their Syd­ney Uni­ver­sity days: they were both active stu­dent politi­cians, while I was one of the lead­ers of the stu­dent revolt against the eco­nom­ics cur­ricu­lum there. Abbott and Turn­bull both tried to play a role in this “Polit­i­cal Econ­omy” dispute—and their approach then mir­rors their styles today. One believed he knew the word of God, while the other believed he was God.

Abbott tried to defeat what he described, in his pecu­liar nasal drawl, as “the Maarx­ists” behind the protests. He went beyond speak­ing against us at meet­ings and vot­ing against us on the Stu­dents Rep­re­sen­ta­tive Coun­cil to, shall we say, robust attempts to stop us putting up posters in the dead of night.

He failed. He lost the votes in pub­lic forums and on the SRC. The posters went up, and most of them stayed up—my favourite stayed for years, because we cleaned it into the tar­nished cop­per cladding of the library stack.

Turn­bull tried to reach a nego­ti­ated set­tle­ment between the war­ring sides: a major­ity of the stu­dents and (a sub­stan­tial seg­ment of the staff) on one side, and the Pro­fes­sors Hogan and Simkin and Vice-Chan­cel­lor Williams on the other.

He failed too. At a meet­ing where I was one of two invited stu­dent speak­ers, the Eco­nom­ics Fac­ulty voted, against the Pro­fes­sors’ wishes, for an inquiry into the Depart­ment of Eco­nom­ics. The inquiry rec­om­mended, against the Vice Chancellor’s wishes, that the Depart­ment should be split in two.  This occurred in 1975 with the for­ma­tion of the Depart­ment of Polit­i­cal Econ­omy, which still exists today.

So Turn­bull and Abbott were bit play­ers in that drama, but of course their eyes were set on a big­ger role: that of becom­ing Prime Min­is­ter of Aus­tralia, as they both have now done. We knew those ambi­tions back in the 1970s too, and we laughed.

It turned out to be no laugh­ing mat­ter so far as their ambi­tions went, but for the coun­try itself, their success—and that of Rudd before them, and frankly many others—was a cry­ing shame. Their one qual­i­fi­ca­tion for the top job was the unshake­able belief that they deserved it. That self-belief, and the drive that went with it, car­ried them all—Rudd included—to the top.

But is that any way to select a country’s top deci­sion-mak­ers? I recently had an inter­est­ing con­ver­sa­tion with another Rudd—Greg, not Kevin—who has been argu­ing that the entire struc­ture of pol­i­tics is a hang­over from long-gone ages, when Big Men led us against the other preda­tors in the African veld—the lions and the other Big Cats—or more recently, when class con­flict shaped the for­ma­tion of mod­ern cap­i­tal­ism, and a cer­tain Karl Marx forged his the­o­ries. Greg Rudd likens our cur­rent system—of vot­ing between adver­sar­ial polit­i­cal par­ties vying for power, who then war it out in Par­lia­ment until the next round—to nom­i­nat­ing some­one as Man­ag­ing Direc­tor to the gov­ern­ing board of a com­pany, but also appoint­ing another Board, led by a rival, whose sole aim was to block the Man­ag­ing Director’s every move.

Surely, if the last decade of Prime Min­is­te­r­ial merry-go-rounds has taught us any­thing, it’s that we should throw out the merry-go-round itself, and adopt a form of polit­i­cal gov­er­nance more suited to the mod­ern com­plex world in which we live.

We should fol­low the other Marx—Groucho—and apply the rule that no-one who actu­ally wants the top job should get it. The last per­son who should be mak­ing deci­sions that affect our lives so pro­foundly should be some­one who believes he can’t make a mis­take.

And it shouldn’t be a sin­gle job either: the mod­ern envi­ron­ment that human­ity has largely crafted is too com­plex in all its features—its eco­nomic and social sys­tems, its eco­log­i­cal uncer­tain­ties, and the chal­lenges of mov­ing beyond our plan­e­tary bound­aries which are now the province of entre­pre­neurs as much as governments—for any sin­gle ego to be able to even under­stand the issues, let alone make the right deci­sions about them. We need a team, not of God-com­plex suf­fer­ers and polit­i­cal hacks, but of experts in the many com­plex sys­tems that make up our mod­ern world. And they should be assisted by the expert com­puter sys­tems we have now begun to develop to help us under­stand this com­plex world.

That’s dream­ing about the future, but let’s hope it doesn’t remain a dream. How­ever this year, we’ll face yet another round of the same old night­mare: a con­test between con­gen­i­tal nar­cis­sists for the top job (I can’t claim any per­sonal knowl­edge of Shorten, but he’d need to be a devi­a­tion from the norm not to fit that mould). Let’s hope it’s one of our last. This is no way to run a coun­try.


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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  • Mark­Thom­son

    Until half way through the sec­ond last para­graph I was quite sure you were about to come out as a lib­er­tar­ian! 🙂

  • jbra­gin

    Much the same can be said of the USA. Our merry-go-round of politi­cians may be of dif­fer­ent par­ties, but the impe­r­ial pres­i­dency, the feck­less Con­gress (where the only job that counts is get­ting re-elected), the dys­func­tional gov­ern­ment agen­cies that grow in size and cost (even, or even espe­cially, under Repub­li­can admin­is­tra­tions) all demon­strate how our democ­racy and econ­omy has been hijacked by the few at the cost to the many. Bernie Sanders is not with­draw­ing from the Demo­c­ra­tic Pres­i­den­tial Pri­mary until he is voted down, because he wants to try to use his 1900+ del­e­gates to get a Demo­c­ra­tic Party Plat­form (Man­i­festo) that will rev­o­lu­tion­ize how the Party works, but he is dream­ing. Even if Hillary agrees to such a Plat­form„ there is no way she and a pos­si­ble Demo­c­ra­tic House and Sen­ate will do any­thing dif­fer­ent. For a cogent analy­sis of this I sug­gest read­ing a short book by Andrew J. Bace­vich, enti­tled THE LIMITS TO POWER (2008). Bace­vich is to pol­i­tics what Steve Keen is to eco­nom­ics & finance.

  • F. Beard

    We need a team, not of God-com­plex suf­fer­ers Steve Keen

    Or those who think they know the Bible but really don’t oth­er­wise they would never suf­fer a gov­ern­ment-priv­i­leged usury car­tel.

    and polit­i­cal hacks, but of experts in the many com­plex sys­tems that make up our mod­ern world. And they should be assisted by the expert com­puter sys­tems we have now begun to develop to help us under­stand this com­plex world. Steve Keen

    Otoh, a require­ment for a lot of reg­u­la­tion indi­cates an unsta­ble sys­tem. Our money and credit sys­tem is such a sys­tem and should be reformed on eth­i­cal grounds such as allow­ing inher­ently risk-free accounts for all at the cen­tral bank and prop­erly* abol­ish­ing gov­ern­ment-pro­vided deposit insur­ance.

    *via equal fiat dis­tri­b­u­tions to all cit­i­zens to pro­vide the needed reserves required to trans­fer deposits from cur­rently insured accounts at banks to inher­ently risk-free indi­vid­ual cit­i­zen, busi­ness, etc. accounts at the cen­tral bank.

  • twowith­inthree­thati­sone

    We need to con­cen­trate less on chang­ing the minds of the DSGE econ­o­mists (and even many of the het­ero­dox) and more on a grass roots mar­ket­ing strat­egy to small to medium sized enter­prises and the indi­vid­ual that makes them aware of their own self inter­ests. This kind of men­tal jujitsu is more effi­cient, and sell­ing the self inter­ested need is the first rule of mar­ket­ing any­way.

    More money directly and cost­lessly gifted into the hands of the indi­vid­ual and rec­i­p­ro­cally gifted first to the con­sumer in the form of a dis­count to retail prices and then back to the mer­chant who gifted it to the con­sumer are the mon­e­tary and eco­nomic poli­cies that makes an alliance between the indi­vid­ual and the small to medium sized busi­ness a nat­ural one. Once the free­ing effects of that are rec­og­nized by both of those large con­stituen­cies 99% of the politi­cians will fall in line to sup­port it and the DSGE et all will become irrel­e­vant.

    Par­a­digms are gen­er­ally accepted ideas, ideas change people’s real­ity instan­ta­neously and so new par­a­digms change lit­er­ally every­thing and even do so with­out the need to make whole­sale struc­tural changes. 

    This is The New Pow­ell Memo I have been push­ing for the last 10 years and that the online mag­a­zine Evo­nom­ics has said is nec­es­sary.

  • striped-pad

    The last per­son who should be mak­ing deci­sions that affect our lives so pro­foundly should be some­one who believes he can’t make a mis­take.


    We need a team, not of God-com­plex suf­fer­ers and polit­i­cal hacks, but of experts in the many com­plex sys­tems that make up our mod­ern world. And they should be assisted by the expert com­puter sys­tems we have now begun to develop to help us under­stand this com­plex world.”

    I under­stand the sen­ti­ment, but what if those experts are so con­fi­dent in their mod­els and com­puter sys­tems that they too believe that they can’t make a mis­take? Isn’t that a big part of the prob­lem we have at the moment — that experts trust their mod­els more than real­ity, and that if they don’t agree then real­ity must be wrong?

    Also, given that there are many com­pet­ing the­o­ries of eco­nom­ics, would you have a big mix of them all, decid­ing what to do by major­ity vote, or would they all be Post-Key­ne­sians? And how would they be held account­able for their deci­sions, espe­cially since the effects of dis­as­trous eco­nomic pol­icy (such as, say, blow­ing a series of bub­bles) might not become appar­ent for decades, and might even never be linked to the pol­icy in the eyes of the pub­lic?

  • twowith­inthree­thati­sone

    Here’s how you get the real deal on what is the best path for­ward in any area of human activ­ity. You con­sult the world’s major Wis­dom tra­di­tions. For­get about any pre-sci­en­tific dog­mas attend­ing them and mine them for their prover­bial inte­gra­tions of think­ing and act­ing. Wis­dom after all is the very process of the inte­gra­tion of the best pos­si­ble think­ing and acting/philosophy and pol­icy under any given cir­cum­stance con­tem­plated and observed by the sages of yore.….and all too often for­got­ten, neglected, missed, mis­in­ter­preted or inval­i­dated by an increas­ingly dis­tracted and addled mod­ern world beset by its own dog­mas hid­ing in plain sight and hence resis­tant to the sig­nif­i­cant change that an actual inte­gra­tion always is. Wis­dom isn’t Wis­dom unless its an inte­gra­tion of the par­ti­cles of truth in two or more appar­ently oppos­ing sides of an issue/argument. Wis­dom is the best pos­si­ble inte­gra­tion of ONLY those truths, and is also the best pos­si­ble inte­gra­tion of ide­al­ism and prag­ma­tism, ethics and action. Hence Wis­dom by def­i­n­i­tion can­not be either irrel­e­vant or merely reac­tionary. Con­tem­plate Wis­dom and its pin­na­cle concepts.….and you can’t go wrong.

  • striped-pad

    Aren’t you beg­ging the ques­tion there, stat­ing that a syn­the­sis of the world’s major wis­dom tra­di­tions leads to the best path for­ward? To make this claim, wouldn’t you need to eval­u­ate all other pos­si­ble ways to get­ting to the best path for­ward, and demon­strate them to be infe­rior? Is there even such a thing as the “best path for­ward”? Best for achiev­ing what pur­pose?

    But this is also a ques­tion of pol­i­tics. Even if we make the huge assump­tion that there is an objec­tive “best path for­ward” for a soci­ety of mil­lions of peo­ple, and that some peo­ple who are skilled in find­ing it have been given the author­ity to do so, how can we be sure that they will actu­ally do this instead of serv­ing their own inter­ests, or those of peo­ple who bribe, threaten or pro­pa­gan­dise them? It’s a truly dif­fi­cult prob­lem.

    Soci­eties which I per­son­ally approve of have checks and bal­ances, pre­vent­ing the con­cen­tra­tion of power in too few hands. I can’t claim that they are the best for your pur­poses, but I for one would pre­fer not to live in a tech­no­cratic dic­ta­tor­ship.

  • twowith­inthree­thati­sone

    If you truly under­stand what Wis­dom is (the inte­gra­tion of only truths, work­a­bil­i­ties and applic­a­bil­i­ties from oppos­ing dual­i­ties) and what the pin­na­cle con­cept and result of Wisdom’s inte­gra­tions is (a third more uni­fied state of mind/systemic con­di­tion char­ac­ter­ized by bal­ance, equi­lib­rium and flow.….you real­ize its not beg­ging any­thing but one to hon­estly look at it and embrace it.….because it’s Wisdom.…and why embrace any­thing less than that when we’re think­ing about a seri­ous topic.…unless of course one wants to be humor­ous which is fine.…and actu­ally a rec­og­nized and impor­tant aspect of Wis­dom itself.

  • Bhaskara II

    Jim Rogers and Sophie on SophieCo, RT

    Both are charm­ing and Sophie looks younger and she is very sharp wit­ted. Any how about 17mm there are some inter­est­ing things said.

    I think, she is, said to be, related to Eduard She­vard­nadze.

    I picked up in an other inter­view and this one that Mr. Rogers is long the US dol­lar but short US junk bonds. I think, that is how he hedged the dilu­tion cur­rency risk of the mon­e­tary asset. Both dol­lars and dol­lar denom­i­nated junk bonds, are mon­e­tary assets. One long and the other short. He thinks peo­ple will flee to the dol­lar and pos­si­bly has picked really junk bonds. 

    (He had shorted fan­nie mae and freddy mack!)

  • Bhaskara II

    Cor­rec­tion, (Shorted Fan­nie Mae and Fred­die Mac.) That is a great story.

  • Bhaskara II

    The inter­net says Sophie is a grand daugh­ter of Eduard She­vard­nadze.

  • striped-pad

    its not beg­ging any­thing” — twowith­inthree­thati­sone

    I just mean that you’re assum­ing that you already know the best way when you pre­scribe how to find the best way. I’m pre­pared to accept that you believe what you say, but I could just as eas­ily quote Proverbs 1:7 to you. One rea­son I am scep­ti­cal of find­ing truth by com­bin­ing oppos­ing points of view is that, like in Steve’s exam­ples from astron­omy, some argu­ments are actu­ally bet­ter than oth­ers. I don’t think we need to take any­thing from the Ptole­maic model to get at truths about the move­ments of the plan­ets, inter­est­ing though it is to know about the his­tory of ideas. It has been super­seded by a supe­rior model. Or is that not the sort of oppo­si­tion you were think­ing of?

    Do you have any thoughts on the polit­i­cal aspect, namely how to ensure that peo­ple with power are held to account by the rest of us, so that they don’t act against our inter­ests?

  • twowith­inthree­thati­sone


    Thanks for the reply. The way to avoid con­fu­sion, dual­ism and ortho­doxy is to under­stand and prac­tice Wis­dom (men­tal inte­gra­tion of what­ever fac­tors are rel­e­vant and true) Wis­dom is actu­ally the objec­tive sci­ence of truth­ful­ness that adapts and adopts what is real, true and dynamic. It drops any untruth, agenda mon­ger­ing and “rea­son­able” com­pro­mises that alloys the effects of an actual inte­gra­tion and so inhibits or pre­vents an actual inte­gra­tion. Such an atti­tude remains open to fur­ther truth and hence to evo­lu­tion.
    this is in fact the sig­na­ture of good, open minded sci­ence which we see is not preva­lent in eco­nomic the­ory and even many of the so called “hard sci­ences”. And by the way, the hall­mark of sci­en­tific break­through is the inte­gra­tion of an aspect or aspects of the con­scious flow state and the sci­en­tific method. Wis­dom is the con­tin­u­ous inte­gra­tion of human consciousness/insight into organic human affairs. The pin­na­cle con­cept and prac­tice of Wis­dom is hence INTEGRATING, a men­tal verb, a con­scious and puri­fy­ing process of truth­ful­ness. That process, known by var­i­ous names (atman, ken­sho, satori, Grace) is a uni­tary state of mental/systemic/organic flow.

    As far as Ptole­maic the­ory is con­cerned its rel­e­vance is this: we live in Ptole­maic times where ortho­dox­ies and their com­plex and adhoc jus­ti­fi­ca­tions are an indi­ca­tion that a true par­a­digm change is upon us and that a sin­gle deep insight can result in and be the new par­a­digm that is inte­grated into the old and that in turn becomes a third­ness-more com­plete one­ness. Par­a­digm changes are marked by com­plete inver­sions ala replace­ment of the earth with the sun or in the present eco­nomic and mon­e­tary sys­tems the replace­ment of the pri­mary ethic of power with a new ethic of Grace in all of its aspects. As with the helio-cen­tric insight which tran­formed and cor­rected the incon­sis­ten­cies and flaws of Ptolemy and yet left most of the system/temporal real­ity the same so a new par­a­digm of Grace/Monetary Gift­ing will trans­form the power rela­tion­ships in soci­ety and yet many of the struc­tures of the cur­rent sys­tem will remain and indi­vid­u­als and profit mak­ing eco­nomic sys­tems will in fact be freed from many of the bur­dens built up over the period of pal­lia­tive reforms placed on them since the last cri­sis in the 1930’s.

    The way to guar­an­tee that a new policy/paradigm remains true to its philo­soph­i­cal roots and has polit­i­cal force is to have as clear and com­pre­hen­sive an under­stand­ing of the philo­soph­i­cal con­cept as pos­si­ble so that clar­ity and focus are never lost, and then mar­ket both the improved self inter­ests and eth­i­cal­ity of same to the largest con­stituen­cies effected. In the case of a new par­a­digm of Grace as in Mon­e­tary Gift­ing the indi­vid­ual and the small to medium sized busi­ness are a nat­ural alliance because they both have an inter­est in hav­ing a sup­ple­men­tary gift of income go to the indi­vid­ual, and busi­nesses would love to have a way of sell­ing their product/service at retail sale at a dis­count of 30–40% and still get their full price because their dis­counts are rebated back to them. This rec­i­p­ro­cal discounting/rebating/gifting at the very end of the economic/productive process reflects the quin­tes­sence of Grace, Flow and Cycling/Recycling/Process.

    The pri­mary obsta­cle to a mon­e­tary par­a­digm of Grace/Gifting is the almost com­plete monop­oly on credit cre­ation by pri­vate Banks. Gov­ern­ments have the abil­ity to take back sov­er­eign con­trol of money cre­ation, but it must do so with Grace as in sov­er­eign benev­o­lence and car­ing. Grace is the tak­ing of power.….in order to give it back to the indi­vid­ual. And that is why a pol­icy of a uni­ver­sal div­i­dend IS ABSOLUTELY NECESSARY.….otherwise a monop­oly on credit cre­ation by gov­ern­ment will inevitably become cor­rupted. And such Grace/Gifting is rapidly becom­ing more and more nec­es­sary as inno­va­tion and arti­fi­cial intel­li­gence increas­ingly reduce aggre­gate indi­vid­ual demand in the near future.

    Con­tem­plate the nat­ural con­cept and psy­cho­log­i­cal state of Grace, align poli­cies with it, and build a grass roots social and eco­nomic move­ment of self inter­ested par­ties and you can’t go wrong.….personally or sys­tem­i­cally.

  • twowith­inthree­thati­sone

    Jim Rogers is a savvy investor and knows the game well, but so far as eco­nomic the­ory goes he is still strictly an old paradigm/general equilibrium/money is a commodity/the gov­ern­ment is the enemy type.

  • don­aldmcc

    Well said Steve Keen

    The ques­tion arises of how we actu­ally move away from this obses­sion with indi­vid­ual lead­er­ship and the ridicu­lous need for some­one to occupy that role. I have devel­oped on on-line plat­form ( which can work as a shared plat­form for group deci­sion-mak­ing with­out meet­ings and deci­sions are made when an agreed level of con­sen­sus on the answer has been reached. I am now look­ing for feed­back and com­ments on this alter­na­tive approach which I am hop­ing might be adopted first by enlight­ened vol­un­tary organ­i­sa­tions. Clearly national gov­ern­ments with ego­tis­ti­cal lead­ers will be the last place to adopt — how­ever I also have some ideas to bring them into line more quickly.


  • New­town­ian

    We need a team, not of God-com­plex suf­fer­ers and polit­i­cal hacks, but of experts in the many com­plex sys­tems that make up our mod­ern world. And they should be assisted by the expert com­puter sys­tems we have now begun to develop to help us under­stand this com­plex world.”

    I loved most of the arti­cle Steve. It took me back to fin­ish­ing that last year of the Whit­lam Dream­time at UNSW largely obliv­i­ous to his­tory hap­pen­ning around me.

    I also agree we are being chal­lenged by a com­plex world (I assume you know of the work of Joseph Tain­ter on the trou­ble with com­plex­ity e.g. TAINTER, J. A. 2011. Resources and Cul­tural Com­plex­ity: Impli­ca­tions for Sus­tain­abil­ity. Crit­i­cal Reviews in Plant Sci­ences, 30, 24–34.)

    But regretably com­plex­ity and com­put­ers and benign experts may not be suf­fi­cient. And as one who dab­bles in com­plex analy­sis (Bayes Nets) I doubt the poten­tial of com­put­ers to pro­vide guid­ance until there have been sev­eral rev­o­lu­tions in sys­tems sci­ences like eco­nom­ics and ecol­ogy which dont appear to be yet forth­com­ing. BNs have taught me its not even straight­for­ward to dis­tin­guish causes from effects.

    Then there the prob­lem dis­tin­guish­ing those who dis­pense Wis­dom from those who dis­pense Gob­blede­gook. Are you famil­iar with the recent Igno­bel prize win­ner PENNYCOOK, G., CHEYNE, J. A., BARR, N., KOEHLER, D. J. & FUGELSANG, J. A. 2015. On the recep­tion and detec­tion of pseudo-pro­found bull­shit. Judg­ment and Deci­sion Mak­ing, 10, 549 ? 

    What this and a related machine gen­er­a­tor of deep thoughts — — show is:
    a. How many peo­ple are wired to lap up ‘Wis­dom’ which is indis­tin­guish­able from com­puter gen­er­ated ran­dom bab­ble.
    b. How dif­fi­cult it is for self styled skep­tics such as us to dis­tin­guish such machine gen­er­ated ran­dom bab­ble from the ‘pro­found mes­sages’ of gurus, moti­va­tional con­sul­tants and by exten­sion the 8 sec­ond sound bites of other excel­lent self pro­mot­ing ego­tists and char­la­tans — like Turn­bull and Abbott (and of course Don­ald and Hillary).

    Try the quiz at the Wis­dom site and read the paper and its sup­ple­men­tary mate­r­ial. If every you needed dis­proof of the Eco­nom­ics claim that we are ratio­nal numer­ate crea­tures you will see it here.