The New Economics: A Manifesto

by Steve Keen

In 1517, Martin Luther nailed his 95 theses to the wall of Wittenberg church. He argued that the Church’s internally consistent but absurd doctrines had pickled into a dogmatic structure of untruth. It was time for a Reformation. Half a millennium later, Steve Keen argues that economics needs its own Reformation. In  Debunking Economics , he eviscerated an intellectual church – neoclassical economics – that systematically ignores its own empirical untruths and logical fallacies, and yet is still mysteriously worshipped by its scholarly high priests. In this book, he presents his a New Economics, which tackles serious issues that today's economic priesthood ignores, such as money, energy and ecological sustainability. It gives us hope that we can save our economies from collapse and the planet from ecological catastrophe. Performing this task with his usual panache and wit, Steve Keen’s new book is unmissable to anyone who has noticed that the economics Emperor is naked and would like him to put on some clothes.

Genres: Economics, Finance, Nonfiction, Politics, Business

210 pages, Paperback

First published January 1, 2022

About the author

Steve Keen is a professor in economics and finance at the University of Western Sydney. He classes himself as a post-Keynesian, criticizing both modern neoclassical economics and Marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Hyman Minsky, Piero Sraffa, Joseph Alois Schumpeter, and François Quesnay. His recent work mostly concentrates on mathematical modeling and simulation of financial instability.

Reviews

[The Conspiracy is Capitalism · Rating 5 out of 5]

A New Paradigm: Economics that considers 21st century crises.

Preamble:
--“Economics”: no discipline is more crucial to directly understanding “capitalism”, so no discipline is more propagandized. Thus, the need for “political economy”.
--“Propaganda”: surface-level, linear logic is simple; children learn to make such arguments (now flaunted by internet “logic” bros). The trick is in the underlying assumptions (ex. assuming away crucial aspects of the real-world as “externalities”; what happens when our language lacks the words to describe reality?), as well as contradictions (nonlinear) of the complex real world.

--With this in mind, I present a ranking of economists:
-1st Tier: Critical Political Economists who avoid constant, major externalities when they reapply their abstract theories to the complex real world: it’s best to start with Global South scholars who do not omit the majority of the world: Utsa and Prabhat Patnaik. This becomes difficult with Global North scholars since their scholarship is buried in one vantage point. Perhaps Yanis Varoufakis has some advantage coming from Greece. I’d like to see more on geopolitics/imperialism from author Steve Keen and environment from Michael Hudson
-2nd Tier: Heterodox Economists with major externalities: Ha-Joon Chang, Mariana Mazzucato
-3rd Tier: sandcastle sculptures oblivious of real-world capitalism’s tidal waves but still think they are looking out for the little people (i.e. mainstream Neoclassical reformers): Paul Krugman, Joseph E. Stiglitz, Thomas Piketty
-4th Tier: sandcastle sculptures who could care less (i.e. mainstream Neoclassical zealots): Milton Friedman, Friedrich A. Hayek

--Next, the target audience: the difficulty for critical Global South economists is they first must contend with the mountain of Global North scholarship to be taken seriously; this Everest is an accumulation of skewed assumptions piled on each other, from Classical (imperialist trade theory) to Marx (not living long enough to critique/integrate trade theory) to Neoclassical (rejection of reality) to John Maynard Keynes (representing the British empire). So, while there are accessible historical accounts (The Divide: A Brief Guide to Global Inequality and its Solutions), it’s been difficult finding accessible theory (I've attempted to unpack Capital and Imperialism: Theory, History, and the Present).
--Similarly, integrating the environment back into “economics” is a massive project for the 21st century. This book is not accessible (dense! How did all this fit into 140 pages?!) for the general public; Keen flips on his professor-mode and dives into details to engage with economics students + science/engineering communities. So much labour still needed to translate all this so that it is accessible and participatory!
--For a general audience, start with Varoufakis:
i) Intro to real-world capitalism: Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails.
ii) Alternatives: Another Now: Dispatches from an Alternative Present

The Good:
Keen’s New Paradigm:
--“Debunking” can only get you so far, as you must pair critiques with alternatives to be constructive. Thus, Keen has solidified his new paradigm with the following fundamentals:

1) Money/Accounting:
--Neoclassical fails: I’ve summarized how money/banks/private debt are conveniently obscured in the age of Finance Capitalism (as well as Keen's alternatives, i.e. Modern Debt Jubilee recovery + preventing financial speculation): Can We Avoid Another Financial Crisis?
--If you want to learn a technical skill to decipher how real-world economics actually operates, you start with accounting, not supply/demand equilibrium theology. Keen uses double-entry bookkeeping + Modern Monetary Theory (MMT) to debunk myths regarding government “borrowing” and “public debt burden”: public deficit (spending) = private surplus, i.e. money creation. (Keen developed the software “Minsky” to help model this).
…This is a crucial alternative to the credit-money from private banks (for-profit via interest payments, thus private debt), which dominates the age of Finance Capitalism (the catchy figure tossed around is 97% of money, see the documentary “97% Owned”); if you obscure credit-money and private debt, you are hopeless with Financial crises! (ex. co-opting The Black Swan: The Impact of the Highly Improbable to treat Financial crises as random and exogenous instead of structural).
--The accounting of the Central Bank and Treasury is fascinating, but I’m still working on an accessible presentation. The “Positive Money” folks are helpful, as is Stephanie Kelton, but Michael Hudson is the revelation (The Bubble and Beyond).
--But wasn’t there a “Keynesian Revolution” in mainstream economics? Keen contrasts the vulgarization of Keynes (“Neo-Keynesian” from John R. Hicks to Stiglitz) who butcher the radical direction of Keynes (esp. uncertainty + volatility of future expectations) which “Post-Keynesians” have adopted.

2) Complex Systems Modeling:
--Neoclassical fails: further butchering of Keynes is “microfoundations”, failing complex systems by crudely aggregating from the micro parts to the macro system. Complex systems cannot be reconstructed by simply adding up its parts due to interactions between the parts at various levels leading to “emergence”, nonlinearity, feedback loops, etc.
-Ex. aggregating individual demand curves (already problematic with “Representative Agent” assumption that conveniently omits class distinctions) to form the market demand curve. Plenty more debauchery with Marginal Productivity/Utility theology obscuring the distribution of income/wealth/power…
--Keen refers to the engineering/science communities' application of complex, dynamics systems theory to reveal how medieval mainstream economics modeling remains: Thinking in Systems: A Primer, and presents the alternative of Post-Keynesian “macrofoundations” for macroeconomics. I currently find this approach to macroeconomics more applicable than say Classical/Marxist Anwar Shaikh’s attempts to integrate micro with macro (although I have bigger concerns with Shaikh’s conceptualization of capitalism and imperialism, i.e. focus on “advanced” capitalism as a closed system). Note: Keen’s criticisms of Marxist economics’ “fundamental issues” are absent, see here.

3) Biophysical Economics:
--Neoclassical fails: ugh, where to start? Keen goes back to Classical economics, where Adam Smith went astray from the prior Physiocrats' direction (where land = source of wealth) to focus on labour + production (thus, the “labour theory of value”). This is a neat contrast to Hudson, who is especially bad-ass regarding the geopolitics of Finance Capitalism, but still centers too much on Classical labour theory of value (romanticizing “Industrial Capitalism”: Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy) which simply treats the environment as a “free gift”.
--To actually include the environment (esp. energy) as an input (thus, not just capital + labour inputs) and waste as an output (not just an “externality”) really challenges how we conceptualize economic “surplus”, “growth”, “efficiency”, etc. Keen has only introduced the technical baseline here, but pairing this alongside accounting/complex systems is the key innovation of this manifesto.
--Next steps include synthesizing the technicalities of, say, Energy and the Wealth of Nations: Understanding the Biophysical Economy, with more radical social analyses from Less is More: How Degrowth Will Save the World and Governing the Commons: The Evolution of Institutions for Collective Action. Ecosocialism is of course preparing such synthesizes: Facing the Anthropocene: Fossil Capitalism and the Crisis of the Earth System, Marxism and Ecological Economics: Toward a Red and Green Political Economy, with more focus on critical history: Capitalism in the Web of Life: Ecology and the Accumulation of Capital, etc.

The Questionable:
Economics, Ideology and Real-world Imperialism:
--I gave this book 5-stars based on the technical tools it presents and its outreach to the science/engineering communities; both are crucial for contending with 21st century crises. A bonus is the lack of sugar-coating when it critiques useful idiot economists.
--However, I am weary of Keen’s Western reformist ideological framing (“For all its flaws, capitalism was and remains an exciting social system.), where “progressive” means “progressive capitalism” and the S-word is still stigmatized by the decolonization and rapid-industrialization of 20th century socialism. I’ve summarized this in reviewing fellow reformist Mazzucato’s sugar-coating in Mission Economy: A Moonshot Guide to Changing Capitalism.
--The bottom line is both Keen and I converge on “revolutionary reforms” (another example is Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist) but we approach from different angles based on how we integrate geopolitics (esp. imperialism) into the economics of capitalism. Consider:

1) History of State creation of money + markets:
--Keen’s presentation of the State’s historical role here is crucial. However, the simplifying assumption made is the “State” is a (prominent) Western state. The picture becomes more dynamic once we include the history of colonialism and Western colonial states' relationships with colonized state in terms of trade dependency through forced “free market” extraction/deindustrialization and colonial monetary policies (foreign debt in foreign currencies, colonial taxation’s drain of wealth, etc.). See Capital and Imperialism: Theory, History, and the Present and Utsa Patnaik interview.
--It’s important to note that Modern Monetary Theory (MMT) assumes a sovereign government (and a sovereign central bank) and is developed by US progressives; while MMT is important for US domestic welfare, it is crucial to recognize the global function of US dollar imperialism. Thus, MMT must be paired with the geopolitics of de-dollarization! (This is why Hudson is next-level: Super Imperialism: The Origin and Fundamentals of U.S. World Dominance; here's Hudson on MMT).

2) Industrial Capitalism vs. Finance Capitalism?:
--Progressives like Keen can't help but idolize a figure on the “Right”: Joseph A. Schumpeter and his vision of entrepreneurial innovation. Similar to Hudson, there seems to be this idea of labour partnering with enlightened Industrial Capitalists to regulate Financial Capitalists and prevent the mutual destruction of Financial Crises. There’s a fine line between short-term pragmatism and long-term “revolutionary reforms”...
--I prefer Varoufakis’ framing of “networked corporations” and the radical alternative of “corpo-syndicalism” (synthesizing with anarcho-syndicalism/Worker Self-Directed Enterprises) on the production side described in Another Now: Dispatches from an Alternative Present (highly recommended for “revolutionary reforms”). Varoufakis also includes public banking/cooperative investments, while Keen is surprisingly tepid towards private banks (ex. government bonds provide a source of income to private banks which can incentivize them to speculate less and invest in production, uh, Hudson can you counter with the history of private banking?).
--Of course, Industrial Capitalism looks much more different once we consider imperialism. I cannot get over how Hudson completely flips a switch between romanticizing Industrial Capitalism (America's Protectionist Takeoff 1815-1914) vs. critiquing imperialism rather than synthesizing the contradictions, i.e. the triangular imperialist relationship where US/German industrialization relied on Britain’s open domestic markets and British capital exports, which Britain was only able to balance the accounts for due to its drain of colonial India.

3) War Economy and the Golden Age of Capitalism:
--When Keen does integrate geopolitics, he is a revelation. Keen mildly lays out the function of war in capitalism: capitalism has re-occurring Financial recessions where a normal (i.e. non-war) recovery renews credit but at rising levels of private debt (since these are the assets of the most-wealthy, thus it would be class war to wipe off). This private debt eventually builds up into a Depression.
...War is the one capitalist recovery rivaling Hudson’s Ancient Debt Jubilees in substantially altering the ratio between economic growth (fiat money creation + war production) beyond private debt levels, citing the startling ratio for the US Civil War, WWI and WWII (Hudson would add the debt forgiveness underlying the post-WWII German Economic Miracle, which targeted Nazi assets).
--Keen wants to get the private debt ratio back to where it was at the start of post-WWII’s “Golden Age of Capitalism”. The litmus test for progressives is always how they then explain the “stagflation” that ended their precious Golden Age and allowed a twerp like Milton Friedman to take over and become a war criminal. Keen misses this when he simply states the baby boomers re-inflated the credit bubbles, but thankfully mentions the oil shocks in the footnotes; Hudson + Varoufakis can add the geopolitics of the US postwar plan: The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
--But we can go one step further (yes, imperialism) and consider the threat of Third World Industrialization + New International Economic Order (NIEO), i.e. your entire global capitalism is predicated on colonial-era cheap raw materials/energy/labour, hallelujah! (economics: playlist ...politics: The Darker Nations: A People's History of the Third World)

...see comments for remainder of review...

[T · Rating 4 out of 5]

"I am often asked what I would keep of Neoclassical economics in a new paradigm. My answer is that I would keep as much Neoclassical economics as modern astronomy kept of Ptolemaic astronomy - which is to say, nothing at all" (74)

Oh. My. God.

Steve Keen presents less of a manifesto, but more of a continuation of the themes raised in his previous books, namely a full blown attack on Neoclassical economics, and a radical rethinking of economics and the consequences of economic theory. For Keen, economics has remained within an old paradigm (the use of that word in particular is linked to Thomas Kuhn's work on science) which failed to predict the 2008 crisis, and will continue to fail society. Keen wants to therefore replace this paradigm with one that takes into account the following: the possibility of financial crises; climate change; the monetary dynamics of capitalism; the role of energy in the economy and the laws of thermodynamics; developments mathematics and science; the complexity of the economy as a dynamic and non-equilibrium system; and empirical data (such as the Black Swan event of 2008). If economics develops one funeral at a time, with paradigms shifting when the current paradigm fails to explain an anomaly (a la Kuhn), Neoclassical economics is a walking corpse.
To do this, Keen argues that we ought to go and learn complex systems, mathematics, and also go back to reading John Maynard Keynes, Hyman Minsky and other Post-Keynesians, Modern Monetary Theory, and recent developments in climate science. This, for Keen, is how to replace the Neoclassical system.

Chapter 1 outlines the necessity of this book. I use the term book, as the publishers forcibly named it a manifesto, which I feel is a little misleading. The reasons for the book are mainly the reasons outlines above. Here, Keen also outlines his programme Minsky, which he has been using to model the economy, and he hopes will help us evade crises.

Chapter 2 explores the monetary dynamics of capitalism. Keen argues that Neoclassical theory takes the assumption that money is simply a 'veil over barter' (a view which is taken from classical economics, 31), and is therefore unimportant. Money, in the Neoclassical system, is only taken into account for the purpose of explaining inflation, to which Keen blames on Milton Friedman's pervasive influence. Keen then outlines the problems with Milton Friedman's monetarist theories, and the failed experiment of it in practice. Keen then explains Modern Monetary Theory (MMT), and the way in which it explains how currency is issued by the Central Banks, and how application of MMT demonstrates that spending precedes taxation (for this Keen uses double entry bookkeeping to bolster his claims), and then he outlines that "far from government deficits 'burdening future generations' they enrich current generations monetarily" (45). The idea of a modern debt jubilee, something which Hudson and Keen have been championing for quite some time, is then outlined.

Chapter 3 then outlines the complexity of economics, and the Neoclassical system's failure to comprehend this complexity. Keen argues that Neoclassical economics fails due to its 'constructionist' fallacy (or alternatively the fallacy of composition) that macroeconomics can be derived from microeconomics. Or to put it simply, that claims about the economy proper, can be taken from observations about smaller units of economic activity like a firm or household. This is very similar to Mark Blyth's claim about austerity economics (see Austerity: The History of a Dangerous Idea), that intuitive statements about the economy were used to bolster failing policies which argued that government spending and debt operated like the spending and debt of an indiviudal or household. Hyman Minsky's verbal model of the causation of financial crashes it outlined, something Keen then turns into a mathematical model (84-86).

Chapter 4 sees Keen outline his views on the role of energy in production, something which Keen argues is the failure of any labour theory of value economists from Smith to Marx. Following this, the environment, and the failure of Neoclassical economists to take into account the world-shattering impact of climate change on society, and the economy, are spelled out. Keen sees economists like the Nobel Laureate William Nordhaus (whose textbook, written with Paul Samuelson is still to my knowledge taught in some colleges) systematically underestimate or ignore the effect of climate change. Nordhaus authored a number of studies which make the baffling conclusions that global warming would only impact annual growth negatively by 0.015%, and that climate change would only impact 13% of the economy, because 13% of economic activity occurs inside. Keen ridicules this, calling it part of the 'neoclassical disease', which he aptly titles his next chapter.

Chapter 5 sees Keen attacking the assumptions of Neoclassical economics. Amongst these include Milton Friedman's anti-empirical argument that economic models should describe the economy 'as if' firms act in the manner that Neoclassical economists believe firms behave. Another is Paul Samuelson's assumption that a family behaves like a 'benevolent central authority' which distributes income for maximal pleasure. These ideas, published in major journals that shape economic thought, demonstrate to Keen the problem of a dangerous groupthink in economics, wherein likeminded individuals in tight-knit communities share the same opinions and exclude dissenting views.

The final chapter is short and sweet. Keen's message here is clear: abandon mainstream economics, take a contrarian education in economics (if you must get a degree in it) at a heterodox university, and read up on the developments which Keen recommends (e.g. system dynamics).

[Tarz · Rating 3 out of 5]

A great book. But coming from a student of economics, I really did struggle to comprehend some of his arguments, especially with the backing of his Minksy Godley Tables/ well-articulated (yet overly-advanced) use of applied mathematics and the theory of complexity.

I did enjoy this book. But I really would have liked to see how Keen’s New Economics school of thought would alter policy to help avoid the future the Neoclassical Economists ‘doomed us to’. There were lots of amazing, potent points about the shabby foundations of Neoclassism, and I really did agree with many of them- worryingly how much I had previously read in my textbook was being overturned within one or two lines, scary!
I also really did enjoy the crash-course in Biophysical economics and the link between Thermodynamics and Economics (which I have never thought to link!!)

But, honestly if this book was slightly more accessible, it would be much more of a beacon of change, and a call to arms than academic literature, which arguably, in a time where it’s 40’C in London- is exactly what we need.

[Toby Rossiter · Rating 5 out of 5]

About a third of the book, around early to mid part, was a bit of a technical trudge. The latter part is very good - Keen's anger at neoclassical economists becomes more and more evident, but he elucidates it enjoyably.

[Jeff Kaye · Rating 5 out of 5]

Having studied economics at university when Friedman-style monetarism was the mantra (as taught by Laidler and Parkin) I have, ever since, taken the view that my degree was based on falsehoods that sought to prepare us for nothing. So, I did not venture into more formal studies, but entered the business world, meanwhile reading throughout on complexity, disequilibrium, the role of money in the economy and on climate change and how energy is an intrinsic and vital element in economics. All these things were ignored when I studied the subject and, as Keen shows, haven been ignored since by classical economists. It is well over 40 years since I left university.

Finally, all of these are brought together by Steve Keen in his 'Manifesto'. I say 'finally' with great trepidation as, while this book, its explanations of the absurdity of mainstream economics and its pointers towards the writings that would give economics credibility in this ever-confusing world, it is still early (!) days in the move from nonsense to some form of credibility.

I would ask anyone with a mind to understand how economies work to read this book but acknowledge that it is a depressing read because it lays bear not just how far economics has to go but also how incredibly far its practitioners have to travel before they accept that nonsensical judgements on how people act (rationality and familial, along supply / demand curves that demand that economies of scale do not exist - as just a few examples) and how economics has to be so simplified that it takes out all the issues that bear down on humankind must be thrown out!

To exclude energy from the analysis, as one grotesque example, is to exclude reality. As one of the most incisive economists (Georgescu-Roegen) showed, the use of energy and the concept of entropy (the 2nd law of thermodynamics - the gradual decline of disorder in a system) are fundamental to our understanding of existence. Yet, classical economics ignores them.

Steve Keen's book is excellent. It is a real manifesto for our uncertain future, one that will be vastly more uncertain and appalling if classical economists continue to be in positions of authority.

[Paul Raphael · Rating 3 out of 5]

Pitched at a slightly awkward level and slightly arrogant in its professed intentions, Keen's work nevertheless contains some nuggets of truly insightful economics.

[Aryan Aggarwal · Rating 3 out of 5]

The New Economics aims to replace the traditional schools of economics by presenting a unique way of looking at macroeconomics. The book aims at 3 main ideas: a new definition and model for money, a new way to look at macroeconomic phenomenons through the lens of complexity and a critique of standard environmental economics. As far as the arguments go themselves, I believe all three ideas are great and worthy of having an entire devoted to them. However, here lies the problem.

Steve Keen fails on two fronts. First, he fails to completely flesh out his ideas in a simple and intuitive way to a broad audience. As a student of economics, it was often difficult to even grasp a lot of his arguments. The ideas simply needed more pages and should have been presented from the ground up assuming little to no prior knowledge. Second, Steve Keen seems to be stuck in his hate for Neoclassical economics, an opinion he reminds us of often. While his criticisms may be apt, passages come off as a rant instead of an intellectual argument. He fails to draw out wider implications for policy, finance and business from his insights and fails to deliver a simple, intuitive and radically new system to look at the world.

Alas, the book is full of great ideas with poor execution.

[Arilando · Rating 3 out of 5]

I do not think there is much covered here that is not covered better in Debunking Economics. The influence of MMT on especially the second chapter is unfortunate, as this model of the economy is simply wrong and/or misleading. In general Keen's books since Debunking Economics have not been impressive. The chapters beyond chapter 2 are fine, but are not very detailed and all of it has been covered elsewhere. Overall i cannot recommend reading this book, although i don't consider it a particularly bad book, which is why i give it a rating of 3.

[Zachary Cefaratti · Rating 3 out of 5]

At the core of "The New Economics" lies a central argument: neoclassical economics, with its emphasis on individual rationality, market efficiency, and self-regulation, has failed to adequately address pressing global challenges such as income inequality, environmental degradation, and financial instability. Drawing on a rich body of interdisciplinary research, the author posits that the new economics should prioritize human well-being, social equity, and ecological sustainability over growth and market-oriented outcomes.

One of the key tenets of the new economics is the recognition of the complex, adaptive, and interconnected nature of socio-economic systems. The author critiques the reductionist approach of neoclassical economics, advocating instead for a more holistic, systemic understanding of economic processes. This perspective enables policymakers to better appreciate the unintended consequences of policy interventions and the interplay between various economic actors and institutions.

Another central argument concerns the role of the state in economic affairs. The new economics envisions a more proactive state that actively shapes markets to promote social and environmental objectives, rather than merely correcting market failures. This approach demands a reevaluation of the role of fiscal and monetary policy in achieving broader societal goals, such as full employment, equitable distribution of resources, and climate change mitigation.

Despite its persuasive arguments, "The New Economics" is not without its critics. Some argue that the author's dismissal of neoclassical economics is overly simplistic, contending that the discipline has evolved over time to incorporate insights from behavioral economics, institutional economics, and other heterodox traditions. Critics also question the feasibility of implementing the ambitious policy proposals advocated by the new economics, arguing that such interventions could lead to bureaucratic inefficiencies, perverse incentives, and unintended consequences.

Moreover, skeptics raise concerns about the potential trade-offs between the new economics' goals, such as the tension between environmental sustainability and the promotion of economic growth. They argue that the author does not adequately address these trade-offs, resulting in an overly optimistic portrayal of the transformative potential of the new economics.

[Brendon.goodmurphy · Rating 4 out of 5]

An incredible take down of Neoclassical Economics, and practical, detailed proposals for what should replace it. Keen is brilliant, and knows his math - be warned this can get very technical (a lot went over my head). He shows that most of the Economics taught in universities today is completely based on junk science. To see it laid out this way, really is shocking. Some examples: economics today doesn't include money, banking or debt in any of its modeling (so of course it couldn't predict the 2007/8 crash). Any time a new scientific observation is made, the economic model isn't reformed to reflect it, but treats it as an "exogenous" factor. In short, it's an academic field committed to ideology rather than scientific truth.

To get the complete picture of this story, you will have to turn to other books that explain why and how economics was captured by the elite/1% to trick society into believing there is a scientific basis for economic policies that protect their wealth and interests. There are many, but one great book is "Democracy in Chains" by Nancy MacLean.

[Arup · Rating 5 out of 5]

If only every junior undergrad read this book before getting indoctrinated by neoclassical conmen, society would be better off. Economics is a bloated field which yields little tangible knowledge. In most cases the findings are not falsifiable - and therefore we don't call it a science.

But the real sad part is that consumers of economics - for ex. market participants like us - either take economists' conclusions as gospel (the believers of DGSE models and inflation always converging to the central bank target of 2% within two years) or totally ignore them (economics forecasted 20 out of the last 2 recessions / clueless about how money or markets actually work). As such, industry is not funding the iconoclasts in today's economics departments. System dynamics has not found a place in econ PhD programs. Neither have graph theory and causality studies. Everything is still modelled as static equilibria. And more often than not, the status quo is the equilibrium. How convenient!

[Zac Muncy · Rating 5 out of 5]

A Bold and Much-Needed Rethink of Modern Economics

Steve Keen delivers a powerful critique of mainstream economics in The New Economics: A Manifesto. With clarity, courage, and deep analytical insight, Keen exposes the flawed assumptions behind neoclassical theory and presents a compelling vision for an alternative economics grounded in realism and systems thinking.

This book is both accessible and rigorous—perfect for readers with or without a background in economics. Keen’s use of empirical data and dynamic modeling gives the text real-world relevance, while his writing style keeps even complex ideas engaging. Particularly impressive is his focus on ecological sustainability and financial instability—issues far too often sidelined in traditional economic discourse.

A must-read for students, professionals, and anyone who feels that the current economic paradigm is out of step with reality. This isn’t just a critique; it’s a call to action. Highly recommended.

[Jared Bibler · Rating 5 out of 5]

An excellent short introduction to cutting-edge thinking in the economics of the future.

As an undergraduate at MIT who found himself fascinated with systems dynamics and modeling (of complex systems like control of an airplane or a precision machine) my dip of the toe into MIT’s storied economics department left me confused and bewildered. Why, when we had fantastic software and techniques to model complex systems, were these famed professors sticking to intersecting lines on a chalkboard? It didn’t make any sense to me.

Keen answers this question and the answer will really surprise. Short story: of course dynamic modeling is the way to go also for economics — let’s hope that we can reinvent the discipline before neoclassical thinking kills off our species with its ludicrous and nonsensical, yet widely followed, assumptions about our economic and social system.

[Wyatt Whitman · Rating 5 out of 5]

This book was a lovely slog—heavy on statistics, dry as a saltine, but somehow still worth it. It offers a deep dive into the origins and profound shortcomings of neoclassical economics: what you’d normally find in the dimmer corners of YouTube, lovingly parroted by the Heritage Foundation crowd.

The book is predicated on the fact that neoclassical economics isn’t so much a science as it is a religion, complete with its own sacred texts and prophets. It doubles as a fantastic rebuttal to the kind of "economic facts” you’d expect to see in a Ben Shapiro rant.

With a full 50 pages of references, It's clear this book is a labor of love and that's palpable from reading. I came away smarter, but mostly combative. If you're looking to shove graphs in the face to anyone who’s ever treated microfoundations as anything but trash - please forward a copy post haste!

[Michael · Rating 4 out of 5]

I only took a few basic economics courses in college, so I can't really speak to the fairness of Keen's representation of Neoclassical economics. He demonstrates that Neoclassical uses a basic algebraic representation of the economy extrapolated from microeconomics, which massively misses the mark due to interactions between societal factors, and the simple fact that individuals don't all behave the same. I appreciate the depth on the topic of climate change and how most models utterly underestimate the impact.

Overall a great introduction into non-Neoclassical thinking for someone starting their studies in economics, or anyone looking for tools to understanding economic trends more accurately than the supply & demand curve.

[Randy · Rating 5 out of 5]

I started Steve Keen's Debunking Economics a while back, but have not completed yet. This is a short and new book, so I decided to complete it first. I'm really impressed with the author's understanding of different fields, and I'll read Philip Anderson’s ‘More is Different’ to get more insight about emergent properties. I've never been a fan for neoclassical economic theory and thought behavioral economics could start the process of paradigm shift when the great recession occurred. Unfortunately, that didn't happen. In addition of providing incisive criticism of neoclassical economics, this book offers a road map to a new theory of economics. I can't wait to see neoclassical economics gone.

[Mohamed E · Rating 2 out of 5]

While the latter chapters were interesting and insightful (economics as a complex dynamic system, the economics of energy’s contribution to production, and global warming), the book was mostly disappointing as close to half of it was dedicated to the chapter based on MMT flavoured drivel; to quote from that chapter: “Private debt, not government debt, is the primary cause of economic crises… Credit and not government deficit, is dangerous when it is large relative to GDP. Rising private debt, not rising government debt, is the main indicator of crises. Private debt, not government debt, can depress economic activity because it is too high.”, so two stars from me.

[Carlos · Rating 4 out of 5]

An attack on neoliberal/neoclassical economics (pseudoscience) which should be required reading in any economics course.

Unfortunately I’m too dumb to fully comprehend everything in it, perhaps I’ll have to read a few of his cartoon books.
Maybe it deserves 5 stars but… well I just wouldn’t know. Somehow his attacks are very enjoyable and entertaining to read even if you only understand half of the technicalities especially toward the end of the book.

Anyways if you’re interested but not involved in economics his appearance on Lex Fridman’s podcast will probably be enough for you.

[Michael Van · Rating 5 out of 5]

Possibly the most important book I'm reading this decade.

Keen brilliantly lays bare the systemic issues with current mainstream economic thought. None of it makes a lot of sense. As a high-school economics Teacher I'm tasked with teaching neoclassical thinking yet when in front of my "smarter" classes, Economics 101 can quickly devolve into dodgeball.

Keen gives real advice on how to navigate the discipline. The bibliography is pure gold and it's clear that my own path in heterodox economic thinking is just starting.

[Dylan · Rating 4 out of 5]

I wish that Keen had done so much more to critique neoclassical economics, but I appreciate his efforts to blast the field of economics for its methodological errors, its externalization of nature, and its false assumptions about money.

"...I regard Neoclassical economics as not merely a bad methodology for economic analysis, but as an existential threat to the continued existence of capitalism—and human civilization in general. It has to go.” (p. 155)

[Mark Edon · Rating 5 out of 5]

Straightforward explanation of the most blood soaked modern religion with huge influence in the world today i.e. neo-classical economics. Evidence free, arrogant and extremely harmful to most of the earths population but serving the interests of a small elite the neo-classical cultists literally just make up stuff.

Here’s hoping we over throw these tyrants in time to save our grandkids.

[Elliot Varnell · Rating 5 out of 5]

Excellent study of what matters in economics

It gets to the salient points quickly and makes good use of references to other works to lend authority without distracting forays away from the core message.

[Alex Nedelcu · Rating 5 out of 5]

Steve Keen loves making fun of mainstream economists, and I love it too! If I ever have the time, I am definitely going to check out Minsky, and also send an email to Nordhaus to make fun of his climate change modeling. If a third year engineering student can do better, you can do better!

[Alessandro Chiozzi · Rating 2 out of 5]

Unimpressive

[Darren]

A critical review from the May 2022 issue of the Socialist Standard:

https://socialiststandardmyspace.blog...

[Ellis Panteli · Rating 2 out of 5]

Reads more like an extended academic paper so isn’t very accessible. There are other texts that do a better job of explaining alternative economic theories.

[Mohd Jamizal · Rating 3 out of 5]

few factors that need to be considered in economics , creation of money by private banks . Devising policies taking into account environment and social
media

[Tim Howard · Rating 5 out of 5]

A whole new framework for thinking about the economy

[Theodore Wright · Rating 5 out of 5]

Best critique of Neoclassical economics!

[Lorenzo Carrieri · Rating 5 out of 5]

Post Keynesian Etherodox economics at its best integrated with climate change and a fair critique of capitalism. Steve keen is awesome