Written by John Lounsbury
Econintersect: Steve Keen asks a question which would be anathema to most economists. The profession (with some exceptions) does not, in general, realize it has failed. In this must-see lecture, Prof. Keen discusses first how economics made so many false turns (bad assumptions) and became insulated from reality. He then presents some areas which can be studied by economists to rescue them from their self-created grave.
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Please note: Steve Keen has embedded a personal plea for support in this video, a plea which your managing editor enthusiastically supports.
Prof. Keen’s summary from YouTube:
Mainstream economists today see themselves as the descendants of Adam Smith, and they regard their models as having operationalized Smith’s rhetoric about the “invisible hand” of the market. But in fact, they have done the opposite of what Smith imagined: whereas Smith conceived of the market mechanism leading to a socially beneficial outcome despite the intentions of individuals in the market, modern mainstream economics relies upon the fiction of proto-Gods called “rational economic agents” whose expectations are fulfilled.
This is the main new point made in this presentation; I also very quickly explain work done with Paul Ormerod and Rickard Nyman to show that the change in new mortgage debt is the causal factor behind change in house prices.
Source: YouTube
