Steve Keen's Debtwatch

Two promi­nent eco­nom­ics text­book writ­ers have recent­ly writ­ten that the Glob­al Finan­cial Cri­sis (GFC) shows that the world needs more eco­nom­ics rather than less.

Writ­ing in the New York Times, Gre­go­ry Mankiw could see some need to mod­i­fy eco­nom­ics cours­es a bit in response to the GFC, but over­all he felt that:

“Despite the enor­mi­ty of recent events, the prin­ci­ples of eco­nom­ics are large­ly unchanged. Stu­dents still need to learn about the gains from trade, sup­ply and demand, the effi­cien­cy prop­er­ties of mar­ket out­comes, and so on. These top­ics will remain the bread-and-but­ter of intro­duc­to­ry cours­es.” (That Fresh­man Course Won’t Be Quite the Same, New York Times May 23 2009)

Fans of the Aus­tralian movie clas­sic “The Cas­tle” will remem­ber the arche­typ­al line “This one’s going straight to the Pool Room”, uttered by the ever-opti­mistic Dar­ryl Ker­ri­g­an when­ev­er he was giv­en a gift. If you haven’t yet seen the movie, con­sid­er set­ting aside a cou­ple of hours to watch it.

Debt­watch’s “Pool­room gifts” come from the media cov­er­age of the Glob­al Finan­cial Cri­sis. Some are gems–incisive bits of analy­sis that are an infor­ma­tive read. Oth­ers are … well, best char­ac­terised as spin, though they range from out­right spin, to delu­sion derived from think­ing like a neo­clas­si­cal econ­o­mist.

A new Face­book group ded­i­cat­ed to reform­ing eco­nom­ics tuition has just been estab­lished by Edward Full­brook, the coor­di­na­tor of PAECON, the Post-Autis­tic ECO­nom­ics Net­work.

Called Tox­ic Text­books,  its aim is to sup­port and coor­di­nate stu­dent protest against neo­clas­si­cal eco­nom­ics at uni­ver­si­ties and schools around the world. Its man­i­festo is:

Toxic textbooks helped cause the economic meltdown

The cur­rent eco­nom­ic melt­down is not the result of nat­ur­al caus­es or human con­spir­a­cy, but because soci­ety at all lev­els became infect­ed with false beliefs regard­ing the nature of eco­nom­ic real­i­ty. And the pri­ma­ry sources of this infec­tion are the “neo­clas­si­cal” or “main­stream” text­books long used in intro­duc­to­ry eco­nom­ics cours­es in uni­ver­si­ties through­out the world. 

I’ll be speak­ing on the finan­cial cri­sis at the month­ly “Pol­i­tics in the Pub” meet­ing in New­cas­tle next week. It’s on Tues­day May 19 at 6pm at the Hamil­ton Sta­tion Hotel on the cor­ner of Fern and Beau­mont Streets Isling­ton (next door to Hamil­ton sta­tion on the Mait­land Road side of the rail­way line).

I’ll be speak­ing at Pol­i­tics in the Pub on Fri­day May 29, along with Jacob Saulwick from the SMH.  The Loca­tion is the Gael­ic Club, Lev­el 1 (Tel. 9212 1587) 64 Devon­shire Street Sur­ry Hills–just 50 metres or so from the Chalmers Street exit from Cen­tral Sta­tion.

The top­ic will be rather appo­site to the most recent blog entry: “The Rudd-Swan Bud­get 2009 – Whose Inter­ests Will It Serve?”

The event starts at 6pm and fin­ish­es at 7.45pm, after which any­one who wants to sol­dier on can join us for din­ner at a near­by restau­rant.

I first heard the best joke about eco­nom­ics in 1975. The teller was the nuclear physi­cist (and nuclear pow­er advo­cate) Sir Phillip Bax­ter, and he told it in answer to a ques­tion I had asked at a pub­lic forum.

The joke is:

A physi­cist, a chemist and an econ­o­mist are ship­wrecked on a desert isle, along with a con­tain­er full of cans of baked beans.

The chemist says that if they can start a fire, he can cal­cu­late the tem­per­a­ture at which a can will explode.

“And, at this point, con­fi­dence is what it is all about… The first thing is to main­tain some con­fi­dence in our­selves and the prospects for our coun­try over time… Unfor­tu­nate­ly, there is no lever marked ‘con­fi­dence’  that pol­i­cy-mak­ers can take hold of. Our task is very much one of seek­ing to behave, across the board, in ways that will fos­ter, rather than erode, con­fi­dence.  It is such con­fi­dence that, more than any­thing else, will help to dri­ve us along the road to recov­ery.” (Glenn Stevens, April 21st 2009)

In May 1973, dis­sat­is­fac­tion over the teach­ing of eco­nom­ics at the Uni­ver­si­ty of Syd­ney went from a fes­ter­ing sore amongst the staff only to an out­right revolt by a minor­i­ty of the staff, and a major­i­ty of the stu­dents.  In 1975, a new Depart­ment of Polit­i­cal Econ­o­my had its first intake into Eco­nom­ics I℗. Thir­ty four years lat­er, it is still going. Pro­fes­sor Frank Stil­well, who has lived this dis­pute since 1970, is launch­ing Polit­i­cal Econ­o­my Now!, a his­to­ry of the dis­pute, next Tues­day at Syd­ney Uni­ver­si­ty’s Fish­er Library (May 5th, 5.30pm, Lev­el 5).

Eric Aarons’ book Hayek ver­sus Marx: And Today’s Chal­lenges will be launched at Glee­books on Fri­day April 24th at 6pm. I will make an open­ing speech about the book and its remark­able author. There will be pre-launch drinks from 6 till 6.40.

Atten­dance is free, but places are lim­it­ed. Please con­tact Glee­books on (02) 9660 2333, or click on the link to Request a place on Glee­books’ auto­mat­ed book­ing form.  Glee­books is at 49 Glebe Point Rd, Glebe; the launch will take place in the upstairs room, which can accom­mo­date about 100.

Title: “Crunchtime”: Bring­ing togeth­er the best pol­i­cy minds to dis­cuss Aus­trali­a’s future
Loca­tion: Trades Hall Audi­to­ri­um, 4 Goul­burn St, Syd­ney NSW
Link out: Click here
Descrip­tion: The best pol­i­cy thinkers from Aus­tralia and abroad will come togeth­er for “Crunchtime” — Aus­trali­a’s first pro­gres­sive think-tank con­fer­ence.

Tax, social pol­i­cy, the glob­al finan­cial cri­sis and cli­mate change will be pulled apart by impres­sive pol­i­cy minds includ­ing Ann Pet­ti­for from Advo­ca­cy Inter­na­tion­al in the UK. Ann has writ­ten exten­sive­ly on debt and finance, cli­mate change and inter­na­tion­al devel­op­ment and was one of the authors of the UK nation­al eco­nom­ic foundation’s Green New Deal.