by Summary:
I was awarded the Friede Gard Prize for Sustainable Economics in 2022 (see https://www.umwelt-campus.de/campus/aktuelles/news/news-details/friede-gard-preis-2022). After the award ceremony on October 13th, I gave a set of lectures and workshops. I didn't complete the entire set as planned, so I am now re-recoding them and posting one each week for the next couple of months. In this lecture, I prove that credit--the annual change in private debt--is part of aggregate demand and income in a world in which banks originate both debt and money: and that's the world in which we live. Neoclassicals insist on modelling a fantasy world in which banks are "financial intermediaries" between savers and borrowers, with the award of the 2022 "Nobel Prize" in economics to Ben Bernanke being the latest
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Steve Keen considers the following as important:
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I was awarded the Friede Gard Prize for Sustainable Economics in 2022 (see https://www.umwelt-campus.de/campus/aktuelles/news/news-details/friede-gard-preis-2022). After the award ceremony on October 13th, I gave a set of lectures and workshops. I didn't complete the entire set as planned, so I am now re-recoding them and posting one each week for the next couple of months. In this lecture, I prove that credit--the annual change in private debt--is part of aggregate demand and income in a world in which banks originate both debt and money: and that's the world in which we live. Neoclassicals insist on modelling a fantasy world in which banks are "financial intermediaries" between savers and borrowers, with the award of the 2022 "Nobel Prize" in economics to Ben Bernanke being the latest
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| I was awarded the Friede Gard Prize for Sustainable Economics in 2022 (see https://www.umwelt-campus.de/campus/aktuelles/news/news-details/friede-gard-preis-2022). After the award ceremony on October 13th, I gave a set of lectures and workshops. I didn't complete the entire set as planned, so I am now re-recoding them and posting one each week for the next couple of months. In this lecture, I prove that credit--the annual change in private debt--is part of aggregate demand and income in a world in which banks originate both debt and money: and that's the world in which we live. Neoclassicals insist on modelling a fantasy world in which banks are "financial intermediaries" between savers and borrowers, with the award of the 2022 "Nobel Prize" in economics to Ben Bernanke being the latest example of their complete detachment from reality. |
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Much respect Prof Keen been following what you say since I first watched you on the keiser report … Thanks for all you tryd to do … paid the house off got no dept, hopefully when we end back in middle age Serfdom I will have more options that the average serf … Thank you so much & congratulations on the award.
Many thanks. That's a lovely first comment on a video.
Does credit creation lead unemployment rate or is the temporal relationship unclear from the data?
It's not a one-to-one relationship. The main cause of unemployment (that is, unemployment in dollars = people seeking to earn the currency who cannot get it to avoid bank debt) is insufficient effective demand: which means the currency issuer is receiving more back in tax return than it spends less non-government sector net saving. (The sectoral balance accounting identity.) So if you are looking for correlation PLUS causation look to the population rate adjustment to private savings plus tax return, if that sums to less than total government issue (the "deficit") then you'll have involuntary unemployment. But this'll include under-employment (which accounts for people taking out bank credit to live on), so will generally be above the official Labour Department statisticians "unemployment" rate.
Thanks! I'll need some time to process this (not being an economist…). Just to make sure I'm on the right track, is this paper relevant to understanding these relationships: https://keenomics.s3.amazonaws.com/debtdeflation_media/papers/PaperPrePublicationProof.pdf ?
I love when you do new lecture videos. You are a natural teacher at heart. Great job as always!
"There are two types of people who will tell you that you cannot make a difference in this world: those who are afraid to try and those who are afraid you will succeed." –Ray Goforth
Nice lecture, can't wait for the next. Gotta say, @1:33 I beg to differ. When my old man, an accountant and MP then CEO, told me about Neoclassicals and Keynes I could not see how the Neoclassicals were "neat" nor "plausible" it looked like bulllsh*t from the get go to me, it looked like kids stuff. I could tell they were pulling supply demand and IS-LM curves out their a$$es. I stayed in physical science instead. Neat and Plausible in physics is when you do not ignore significant terms in the equations, not when you merely have simple solvable equations. My bro, who was a bit of a capitalist, was the one who went into stock trading etc. Thankfully he has since learned MMT, and now runs his small business like a worker coop.
One thing about studying physics is that you very quickly get exposed to the notion the pure mathematics (without asymptotics, stats and numerics) cannot help you with diddly squat in the real world. And these are the simplest systems known to human minds — driven pendulums and point mass planets. If you cannot solve the three body problem in simple physics you've got serious trouble with any mathematical theory of economic behaviour, and so the rule sets giving us the accounting identities are the only sure thing (or that and entropy & the Second Law – no. of states accessible to an economic system). All else is closer to bullsh*t unless you know the board room decisions and oligarch smoke-filled room machinations, which bias the economic state space towards neo-feudalism distributions.
Where does planned obsolescence fit into this? What does consumers going into debt for junk designed to depreciate when economists ignore consumer depreciation.
NDP = GDP – Dcap [Western economic calculation]
NDP = GDP – (Dcap + Dcon) [reality]
Dcap: Depreciation of Capital Goods
Dcon: Depreciation of Durable Consumer Goods
GDP: Grossly Distorted Propaganda
Solid introduction to software and the importance of money!