About the Book
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 - this version of which includes fully integrated graphs and diagrams - 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.
Essential for anyone who has ever doubted the advice or reasoning of economists, Debunking Economics provides a signpost to a better future.
Table of 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.
Review :
Praise for the First Edition:
'Debunking Economics may not delight economic conservatives, but it is certainly necessary. Our hope must be that it will be read by enough people to prompt reform of our economic thinking and save our endangered societies' - James Cumes, author of 'How to Become a Millionaire without really working', and other books
'Particularly useful to those, like myself, who are interested in economics but not formally trained in it. Debunking Economics reveals that neoclassical economic doctrines are faulty... because the fundamental assumptions from which such doctrines have been derived are less than self-evident' - Henry C.K. Liu, Chairman, Liu Investment Group
'If you are interested in how the economy really works (and want to challenge an economist) then read this book' - James Dick, Professional Members Division, The Economic Society of Australia
'Keen's serious but accessible look at the shaky logical and mathematical foundations of neoclassical economics will be of great interest to students and open-minded economists alike. And his insightful survey of alternative schools of thought lends substance to his call for a new economics.' - Don Goldstein, Associate Professor of Economics, Allegheny College
'A wide-ranging yet accessible critique of the staples of neoclassical pedagogy' - Alan G. Isaac, Associate Professor of Economics, American University
'This text carefully follows the form of argument familiar to all economics undergraduates, through to conclusions from which under-graduates are more usually protected. Avoiding polemic or hyperbole, the case that he presents is all the more damning for its clarity and systematic approach' - John M. Legge, Associate Professor, LaTrobe University
'Debunking Economics... will transform the way economics is taught and thought' - Jan Otto Andersson, Professor of Economics, Åbo Akademi University, Finland
'Professional economists include their own best critics. Steve Keen is one of the very best... translating the algebra into plain language, he deploys a devastating theoretical attack on neoclassical theory' - Hugh Stretton, Fellow of the Academies of the Humanities and Social Sciences, and author of 'Economics: A New Introduction'
'Refreshingly provocative' - Geoffrey Fishburn, Department of Economics, University of New South Wales
Endorsements for the second edition:
'Economics still awaits its Darwin. Keynes came close, but not close enough. Keen comes closer still. Economics, like biology used to be, remains mostly faith-based. No book poses a bigger threat to that faith than the second and expanded edition of Debunking Economics.' - Edward Fullbrook, Editor, Real World Economics Review
'It is notorious that only the most mediocre students have the stomach to stick with graduate economics degree. The assumptions become so narrow-minded and tunnel-visioned that reality-based minds drop out. But economics obviously is important too much so to be left to economists. Fortunately, Steve Keen is an empirical mathematician who views the economy logically and systematically. Having made a pioneering explanatory statistical model, he looked through the literature to review the history of economic thought and saw how little today's assumptions had to contribute to Reality Economics. So his book does two things. First, it explains some of the most wrong-headed logical paths that led today's 'free market' economics down its detour to rationalize the status quo. Second, it explains how to view the economy from a more realistic, cause-and-effect light.' - Michael Hudson, Distinguished Research Professor of Economics, University of Missouri
'You would be hard-pressed to find an individual whose pre-crisis analyses of both the world financial system and the economics profession were more dead on than Steve Keen's. The original edition of this book not only demonstrated the irrelevance of modern theory, but it predicted the major economic and social crisis that occurred. This second edition updates earlier chapters and adds new ones that directly address the causes of the collapse and the reasons why standard solutions have been useless. This book is an absolute must read for anyone wondering what caused this catastrophe and how we can truly put it behind us.' - Prof. John T. Harvey, author of 'Currencies, Capital Flows, and Crises: A Post Keynesian Analysis of Exchange Rate Determination'
'Redemption is this book's greatest gift to a world that grew dependent on the thinly disguised forms of mathematised superstition which, over the past thirty years, managed to dominate economic theory and policy. Keen's book is a tour de force that grants its reader the chance of immunity from these, still dominant, economic superstitions.' - Yanis Varoufakis, Professor of Economics, Athens University
