Steve Keen

Fascinating, embattled and ultimately powerful argument against Neo-Classical economics. Way too combative to make pleasant reading, but ultimately affected the way I regard the "truths" of the Neo-Classical approach which dominates economic thinking.

The book is important and meaningful reading for anyone interested in economics or politics. His points are cogent and persuasive. I gave the book three stars primarily for three reasons: First, while it has many useful charts, they, for the most part, lack legends. If labelled, many of the curves are identified by cryptic acronyms not otherwise identified. Second, for those of us who are non-economists, the book greatly could use a glossary. While terms and acronyms are defined in the text, show more they are often addressed again in later chapters with no explanation -- a glossary would solve the problem. Finally, the text is uneven -- in many places it is quite clear and able to be followed by the layman, in others it introduces concepts which are foreign to non-economists without explanation. Oddly, a little simple math might help to solve the problem.

That said, I highly recommend this book. show less

For people, like me, who had almost given up entirely on the academic field of Economics because of ridiculous theories and poor teaching, there is fortunately still Steve Keen. In this book, the Australian Keen shows the errors of the standard views of neoclassical (orthodox) economics.

Not just some side aspects of the theory, but the actual core views of economics as it is taught in universities everywhere unravels before your eyes. Keen masterfully applies both economic models and show more historical analysis to show that orthodox economists not only do not know what theories exist in their own field, but they also have no inkling of the history of economics and what this means for their approach. This, combined with a possibly even poorer understanding of the philosophy of science (Keen uses Milton Friedman as the main example, but more could have been named), leads to a series of ridiculous assumptions and even more ridiculous results. That the economists consistently ignore the way industrial managers and market analysts etc. do NOT apply their pet theories is just the icing on the cake.

The book is heavy reading for those with no knowledge of economics or maths, but certainly not impossible. A basic understanding of economics and mathematics as taught at high school level (at least in The Netherlands) goes a long way, and Keen fortunately writes well and attempts to avoid long mathematical proofs as much as possible.

The only downside to the book is that his treatment of alternative theories, especially the quite closely linked Austrian school of economics, is very short and vague. This leads to the impression that Keen knows what's wrong with neoclassics, but not what is to be done instead. His critique of Marxist political economics is also very weak, especially considering how little interest he pays to it. Therefore, start by reading this book, but don't end there. show less

Not very clear or convincing. Constantly feel like I need a glossary (uses "marginal productivity", "marginal product of labour" and "marginal revenue product" near interchangeably for example. No idea what makes each different). I fully admit this is at least partially my own fault - it would be ridiculous to expect to understand a huge amount of economics just reading straight through. But I felt it could have been made easier. I felt often like I could see how a neoclassical economist show more would rebut what's being said, although obviously not the details. I'm no friend of neoclassical economics but he seems to sell it a bit short - teaching ridiculously simplistic assumptions to undergrads and then teaching stuff closer to reality later is sadly pretty typical. He shows that the basis of neoclassical economics is crap but a lot of what he says is "right" feels remarkably similar. A lot of the time it didn't feel like it was hitting the right mark between "teaching neoclassical economics and showing the problems" and "sketching out an alternative".

Why is it taken as a given that capital makes a profit in and of itself? It's just stated with no evidence (chapter 7, while explaining Sraffa). Coming from a Marxist perspective it feels pretty pathetic. Actually a lot of the time I was reminded of Marx - for example talk about classes being better ways of analysing things, labour considered separately/important - but he criticises Marxist perspectives, even devoting a whole chapter to it. He apparently knows a lot about Marx but he makes a few criticisms which are just absurd - for example, the idea he quotes of a "commodity residue", which should somehow "prove" the labour theory of value is incorrect by showing that there's always a commodity that labour has to work with. This ignores that capitalism is presented by Marx as historical (therefore not everything previously made has been a capitalist commodity) for a start. http://mccaine.org/2012/07/04/steve-keens-critique-of-marxs-theory-of-value-a-re... This article gives a lot of criticism of this particular section.

He thinks science can be non-ideological but economics isn't and seems to think that the reason for this has nothing to do with the role of economics or anything, just that economists are stubborn or something.

Really it's not my ideological problems that are frustrating me, it's just that I'm not really building up a super clear picture either of neoclassical economics or his alternative because it's tough going with little help from the text in terms of either a glossary, summaries of concepts or anything like that. I don't know if I'm expecting too much but I guess it's important to point out that if you're looking for an intro to economics combined with a criticism of it you'll have a lot of trouble most likely. show less