£18.99 | $34.95

22 September 2011
Paperback
ISBN: 9781848139923
496 pages
216mm x 138mm
Economics

Economics, Sociology and Social Policy, Development, Business Studies

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Debunking Economics - Revised and Expanded Edition

The Naked Emperor Dethroned?

Steve Keen

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, 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.

Reviews

'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

'The new edition of 'Debunking Economics'... provide[s] a more persuasive account of the causes of the crash and of its likely evolution than anything that has yet emerged from Constitution Avenue or Threadneedle Street. This is complicated, but it's in your interests to understand it.'
George Monbiot

'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

'Professor Keen has written a book that will shake the economics community to its core, and for good reason. It could not have been written at a better time.' - Andrew Leeming, author of The Super Analysts

'Much more than simply explaining the causes of the crisis, Keen takes us through a thorough dissection of mainstream neoclassical economics, and the result does not leave the discipline looking in good shape.' - Tanweer Ali, Empire State College, State University of New York, in Heterodox Economics Newsletter

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.