Debunking Economics

The Naked Emperor Dethroned, 2nd Edition

Steve Keen

Debunking Economics exposes what many non-economists may have suspected and a minority of economists have long known: that economic theory is not only unpalatable, but also plain wrong. When the original Debunking was published back in 2001, the market economy seemed invincible, and conventional ‘neoclassical’ economic theory basked in the limelight. Steve Keen argued that economists deserved none of the credit for the economy’s performance, and that ‘the false confidence it has engendered in the stability of the market economy has encouraged policy-makers to dismantle some of the institutions which initially evolved to try to keep its instability within limits’. That instability exploded with the devastating financial crisis of 2007, and now haunts the global economy with the prospect of another Depression.

In this radically updated and greatly expanded new edition, Keen builds on his scathing critique of conventional economic theory whilst explaining what mainstream economists cannot: why the crisis occurred, why it is proving to be intractable, and what needs to be done to end it.
 

Contents

• Preface to the first edition
1. Predicting the ‘unpredictable2
2. No more Mr. Nice guy
Part 1: Foundations
• The logical flaws in the key concepts of conventional economics
3. The calculations of hedonism
4. Size does matter
5. The price of everything
6. To each according to his contribution
Part 2: Complexities
• Issues that should form part of an education in economics, but which are omitted from standard courses
7. The holy war over capital
8. There is madness in their method
9. Let’s do the Time Warp again
10. Why they didn’t see it coming
11. The price is not right
12. Misunderstanding the Great Depression and the Great Recession
Part 3: Alternatives
• Different ways to think about economics
13. Why I did see ‘It’ coming
14. A Monetary Model of Capitalism
15. Why stock markets crash
16. Don’t shoot me, I’m only the piano
17. Nothing to lose but their minds
18. There are alternatives
• References
 

About the Author

Steve Keen is Associate Professor of Economics & Finance at the University of Western Sydney. Steve predicted the financial crisis as long ago as December 2005, and warned that back in 1995 that a period of apparent stability could merely be ‘the calm before the storm’. His leading role as one of the tiny minority of economists to both foresee the crisis and warn of it was recognised by his peers when he received the Revere Award from the Real World Economics Review for being the economist who most cogently warned of the crisis, and whose work is most likely to prevent future crises.