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Professor of Economics Steve Keen: The next Financial Crisis

Hidden Forces  ( Original )
JUN 22, 2017

Demetri Kofinas of Hidden Forces discusses whats coming next with economist Steve Keen. Steve is Professor of Economics at Kingston University in London and one of a handful of economists to correctly anticipate the Global Financial Crisis of 2008.

In this episode, we tear up the textbook of contemporary economics. We dispense with equilibrium. We embrace irrationality. We internalize economic externalities. And, we drop assumptions about the world that do not comport with the reality of lived experience. 

We begin our history of economics with the physiocrats, enlightenment thinkers of the early 18th century concerned with this question: “where does stuff come from?” We move through the classical period of economics, exploring the philosophies of Adam Smith and David Ricardo. We stop to question the assumptions of the Newtonian minded neoclassicists of the late 19th and early 20th centuries, who saw fit to squeeze a complicated world into a set of simple models. 

Where did our ideas of rational preference, utility maximization, and market equilibrium come from? How have these ideas been debunked by the events, insights, and theories of the last 100 years? 

What was the role of John Maynard Keynes and his Keynesian revolution? Where did he and the Austrian Friedrich von Hayek meet? 

Where has the evolution of economics taken us since World War II? What is the role of banking in the economy? How is money created? How does it circulate? What is the role of credit? How might this almost Godly instrument of wealth creation have become a source of global instability and financial distress? 

Finally, Steve and Demetri explore the landscape of the modern economy. The look at China, with its ghost cities and massive state-directed banking system. They explore Australia, Canada, and South Korea, as possible sources for the next financial crisis. And, they examine possible solutions for society, as well as the individual.