In late 2005, Keene became the first economist to predict the 2007-08 financial crisis, earning himself 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.”
In the first half of our interview, Professor Keen explains why conventional economic theory doesn’t describe capitalism accurately, as well as Hyman Minsky’s hypothesis on the significance of private debt in the economy— something that is largely ignored by the predominant “Neoclassical” school of economics today.
In the second half, we turn to the prescriptive. Keen contends the main thing people need to think about is that “as well as workers and capitalists we have creditors and debtors in this economy— and by far the most important social clash these days is not between workers and capitalists, it’s between the financial sector and the rest of the economy.”
As for the Left, Keen thinks in order to win it must be less reactive and more intelligent in their campaigning, otherwise the future we’ll face “will be that of The Hunger Games and not of a democratic society.” That means focusing more on the role of private debt than on wage campaigns or unionization, and fighting for a modern debt jubilee and universal basic income.
Keen wraps up our discussion with his forecast for the global economy and gives us his predictions for what countries are most likely to face a crisis in the next 1-3 years.
** Please donate to Left Out on Patreon to receive exclusive content and access to engaging with our future guests. Your small donations keep this alive: https://www.patreon.com/leftout **
Professor Steve Keen, the first economist to predict the 2008 financial crisis, explains why mainstream economists aren't experts on money and finance.