Steve Keen on Capitalism & Socialism

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[youtube]http://www.youtube.com/watch?v=Wghs9xJqQoI[/youtube]

Steve Keen is a Post-Keynesian economist from Australia who does a lot of empirical work on the "Debt Deflation" model - the notion that the major catalyst of recessions and booms is the level of personal and business debt in the economy, that the business cycle is a result of the credit cycle. Recessions occur when the overall debt level shrinks, in Debt Deflation models.

The "Post-Keynesian" school of economics emphasizes the tendency of unregulated capitalism to go through rollercoaster like cycles, the stabilizing effects government and social conventions have in the face of a fundamentally uncertain future, the pervasiveness of market power, political implications of market power, and the limits to consumer rationality.

In this talk (from a debate with the resolution "Only Capitalism Can Save the Planet"), he speaks of the technological stagnation of coordinationist socialism and the fundamental instability of financial capitalism.

http://www.debtdeflation.com/blogs/

Last edited by Master_Pedant on 10 Jun 2011, 1:56 am, edited 2 times in total.

I instinctively distrust any intellectual movement that has "post" in its name.

YOU ARE A MONSTER!

He also believes Marx was misunderstood and that his theories should be used as the foundation for contemporary economics.

He believes aspects of Marx's theories should be incorporated into economics, a position not that dissimilar to Keynes (who, incidentally, shared a lot in common with the Austrians).

I think it is amusing that you pointed that out. I don't know why you'd point that out, but it is amusing nonetheless, as Austrians distrust Neoclassical Efficient Market Hypotheses, and agree with Keynes in real uncertainty.

Because it was only a matter of time before some vulgar pop Austrian started jeering over how Keyne's openness to some of Marx's ideas would "prove" Keynes was a communist. This fact was used a preemptive counterpoint. Early Austrian economist Friedrich von Wieser, incidentally, was sympathetic to Fabian socialism (according to Mises).

Yeah! Thus far, no vulgar Austrians have commented.

It seems Austrians would agree on the fundamental problem but disagree on the causes and solutions. They're gonna say it would've never happened if government didn't create perverse risk incentives in the financial sector. Not that I can really believe that.