Q: What do John May­nard Keynes and Steve Keen have in com­mon?

A: They’ve both been mis­read by Paul Krug­man.

In just a cou­ple of days I’ve gone from the priv­i­lege of being acknowl­edged by Krug­man to being mis­read by him, in a way that would have any stu­dent failed in a mul­ti­ple choice exam. In a pas­sage where I specif­i­cal­ly referred to DSGE models–which includes both “New Clas­si­cals” and “New Key­ne­sians” he inter­pret­ed me as refer­ring to New Key­ne­sian mod­els only.

And I said “under­ly­ing prin­ci­ples to the DSGE mod­els”, which should have been enough of a clue that I was refer­ring specif­i­cal­ly to New Clas­si­cal mod­els, not New Key­ne­sian ones.

I’m rather lucky with the cal­i­bre of my blog mem­bers, and that’s been in evi­dence in the dis­cus­sion over Krug­man here in the last few days. One com­ment by Andrew Lain­ton sim­ply has to be shared more wide­ly:

Wel­come to Lon­don Steve

I hope peo­ple have spot­ted that Krug­man isnt sim­ply propos­ing a loan­able funds approach to banks, where loans are based on the inflow and out­flow of sav­ings by say­ing that banks ‘must buy assets with funds they have on hand’ he is going back to a mid 19th cen­tu­ry wages fund the­o­ry. Krug­mans world isn’t even Ptole­ma­ic, the world does­n’t even turn and time does­n’t exist.

Jet­lag has me up and at the key­board at 5.54am here in Lon­don, 43 min­utes before sun­rise, which today is at 6.37am.

Only it’s not “sun­rise”, is it? As we all know, it’s real­ly “Earth Axi­al Rotate” at the point in its 24 hour axi­al rota­tion when the Sun—around which the Earth rotates once each year—becomes vis­i­ble from Lon­don.

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Paul Krug­man has just com­ment­ed (twice) on my most recent blog about my paper for INET. In one sense, I’m delight­ed. The Neo­clas­si­cal Estab­lish­ment (yes Paul, you’re part of the Estab­lish­ment) has ignored non-Neo­clas­si­cal researchers like me for decades, so it’s good to see engage­ment rather than wil­ful (or more prob­a­bly blind) igno­rance of alter­na­tive approach­es.

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Fig­ure 1: Krug­man’s first piece

There is a bizarre asym­me­try in eco­nom­ics: crit­ics of Neo­clas­si­cal eco­nom­ics like myself read Neo­clas­si­cal lit­er­a­ture avid­ly, no because we agree with it—far from it—but because we feel oblig­ed to under­stand why they hold to their coun­ter­fac­tu­al views on the econ­o­my.

Lars Schall is a free­lance finan­cial jour­nal­ist in the indus­tri­al heart­land of Ger­many, the Ruhr Area, who focus­es on oil, pre­cious met­als and the mon­e­tary sys­tem. Lars inter­viewed me sev­er­al weeks ago for his pod­cast; click here for the MP3 file, or lis­ten to the link below.

Steve Keen’s Debt­watch Pod­cast

Lars’s overview of the inter­view is avail­able here.

My paper “Insta­bil­i­ty in Finan­cial Mar­kets: Sources and Reme­dies” for the INET con­fer­ence “Par­a­digm Lost: Rethink­ing Eco­nom­ics and Pol­i­tics”, to be held in Berlin on April 12–14, is now avail­able via the INET web­site.

If you’d like to down­load it, you can get it either from my INET page, or from a link on the con­fer­ence pro­gram. For copy­right rea­sons I can’t repro­duce it here, but I can pro­vide a quick syn­op­sis and some excerpts, so here goes.

One of the many great ironies of Amer­i­can cul­ture is that a soci­ety which lauds cap­i­tal­ism is also home to the fan­ta­sy of the self­less Super­Hero: enti­ties rang­ing from an ordi­nary but wealthy human (Bat­man) to an extra­or­di­nary but poor Extra-Ter­res­tri­al (Super­man), who spend their days sav­ing us mere mor­tals, for no obvi­ous rec­om­pense.

Well bol­locks to all that! Meet “Super Cor­po­rate Heroes”—super­heroes who are more in line with the actu­al Amer­i­can Way. These super­heroes are employed by a For­tune 500 com­pa­ny, charge for their services—“if you wan­na get res­cued, you got­ta pay insurance”—and live lifestyles rang­ing from opu­lent to the top billers, to just above the bread­line for the only slight­ly super amongst them.

These are the first two lec­tures of my Advanced Polit­i­cal Econ­o­my class at the Uni­ver­si­ty of West­ern Syd­ney. The class offers an in depth cri­tique of the fail­ures of neo­clas­si­cal the­o­ries, as well as detail­ing my approach to a new eco­nom­ics. Click on the links to down­load the Pow­er­point slides for the lec­tures.

Lec­ture 01: Part 1 — Intro­duc­tion to subject/Failure of Neo­clas­si­cal Macro

APE2012Lecture01A

APE2012Lecture01B

APE2012Lecture01C

Lec­ture 02: Fail­ure of Neo­clas­si­cal Macro (Demand and Sup­ply)

APE2012Lecture02A

APE2012Lecture02B

I’m being inter­viewed by Paul Mason for the BBC Radio 4 pro­gram Analy­sis on April 3^rd, in front of an audi­ence at the Lon­don School of Eco­nom­ics from 6.30–8pm. If you’d like to attend, you can book a place via this link (“Banks vs the Econ­o­my”). Book­ings are free but essen­tial, and will open on Mon­day March 26^th at 10pm. More details are avail­able for the pub­lic from events@lse.ac.uk; email pressoffice@lse.ac.uk for media enquiries.

The LSE asked me to write this entry for their blog British Pol­i­tics and Pol­i­cy at LSE. It’s repro­duced here (along with the data) for Debt­watch read­ers.

Come­di­an-activist Mark Thomas hosts The Man­i­festo on BBC Radio 4, in which he and his stu­dio audi­ence con­sid­er pro­pos­als for a Peo­ple’s Man­i­festo on top­ics rang­ing from the sub­lime to the ridicu­lous. Some­where in the mid­dle, there’s seri­ous stuff with a comedic twist, and in the lat­est pro­gram, my “Mod­ern Debt Jubilee” got a guernsey.

It did­n’t win the Shout, so a pro­pos­al to elim­i­nate tax avoid­ance got up instead, but it’s nice to see that the idea is get­ting into the pub­lic domain.

You can lis­ten to the whole show here (though the link will expire in 5 days), or click on the movie below.