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Positiva Pengar talk on money, both as it is and as it is misconceived by Neoclassical economists


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Positiva Pengar talk on money, both as it is and as it is misconceived by Neoclassical economists
Steve Keen
Steve Keen (born 28 March 1953) is an Australian-born, British-based economist and author. He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Karl Marx, Hyman Minsky, Piero Sraffa, Augusto Graziani, Joseph Alois Schumpeter, Thorstein Veblen, and François Quesnay.


  1. It does seem like conventional/neoclassical economics are stuck thinking in terms of commodity money, or gold bullion effectively.

  2. Really enjoyed this. Engaging, end to end. Seemed to overlap a fair amount with the presentation you gave to the Oxford Economics Society (iirc) from a week or so back, but at a more relaxed pace that I'm sure many will appreciate. (My background is math and CS with about a minor's-worth apiece of physics and econ thrown in, so I'm comfortable with the pace — perhaps even a bit enraptured with the Minksy models.)

    By the way, I just re-installed Minksy on my current laptop and hopefully can get over the initial hump to the point of feeling comfortable putting together models of my own in it.

    On a side note, I can't shake the feeling that if I could get my local senator (the sane one, Senator Mitt Romney — no hope for the other guy) and congressman to watch this presentation with open minds then I think the ideas and perspectives might spread among some of those who most need to hear them. They both have enough finance background (iirc) that the appeal to accounting should keep them from initially dismissing the models and the underlying ideas….I hope.

    I've also long suspected that the system dynamics approach you use could fit within the mathematics of applied category theory that mathematician John Baez of UC Riverside (among other people) have been trying to popularize in recent years. (I'm hoping to study this math at the doctorate level, after a likely side-trip through a masters in CS, the start of which has been delayed by the coronavirus situation.)*

    Prof. Baez has stated that he feels his primary focus right now should be on the climate crisis, so seeing your discussion on climate economics might prompt him to take a deeper look, if I can draw his attention to a presentation such as this. (He's apparently retiring from teaching at the end of this semester; I'm taking this to mean that he wants to turn his attention full-time to using category theory to address climate issues, though I may be presuming things.)

    Anyhow, apologies for the long comment. It got a bit out of hand so I moved a paragraph to a footnote (denoted by the *s) as a way of saying "anyone reading this could probably skip this paragraph, unless they're interested in my barely-informed thoughts on applying category theory to economic and other problems.

    *In particular, I'm curious if a function-esque thing called an adjoint functor (roughly, a function between categories that preserves order structures, ie. the lattice-like structure that symmetries of a state might take on) can be used to, say, use a model in one category to 'synchronize' with a model in another category. As an example of what I'm hoping might be possible, suppose I embed one of your macro models in one category — which I think would happen in a 'states and symmetries' manner — then (1) I'd imagine that some real-world data points would let us pick out a specific flow (if that's the right word here, I'm not sure) that we would basically have the same thing Minsky does, but on paper (and in category-theoretic lingo), and (2) we might find one of these adjoint functors to another category in which we have a model of climate phenomenon, and from this we might be able to make predictions (probabilistic ones, I'd imagine) of the effects of policy choices on climate outcomes. If that can't get governing bodies around the world to act before tipping points are reached (as you described toward the end of this presentation) then I don't know what would.

  3. Great presentation and Q&A. Does anyone know any sights documenting use of the Minksy modeling software in research papers or by organizations (public or private)? Also any public papers/reports extrapolating on related monetary theory beyond the ove mentioned from the Bank of England?

  4. When it comes to eliminating neo-classical econmics, I would hope that the catastrophically poor handling of COVID and the resulting crushing of eceonomic growth above and beyond the recession of 2019 already in progress would hasten than by global competition from China and other places not being run on neoliberal lines. Historically rentierisnm was marginalised by the growth of bourgeois industrial economy, and I sincerely hope that happens again, preferably under socialist management and organisation. The grip of rentierism in the west seems to me to be absolute, with all the attendent evils and stagnation, so it's competitive failure in the world also seems inevitable. Institutional apparatuses of neo-classical economics need dismantling as well as its domination over academic economics departments, such as the IMF, the World Bank, the fake Swedish Bank "Nobel" prize for economics, and the EU.

    In terms of building support for the policy changes you advocate, maybe get on Novara Media sometime, as well as Jacobin. Obviously this needs all the oomph the left can muster, because it's a political problem as well as one of wrong ideas, with the rentiers propping up neo-classical economics through their political control because it serves their interests in particular. So getting your manifesto ask integrated into the international insurgent democratic socialist movement's agenda is necessary.

  5. How de we get stable economic growth without having a temperamentally expanding money supply caused by increasing debt?

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