Is Capitalism Doomed to have Crises?

Steve Keen
Kingston University London
IDEAeconomics
Minsky Open Source System Dynamic
s
www.debtdeflation.com/blogs

Is Capitalism Stable or Unstable?

The (Ultra)-Orthodox Perspective
Edward Prescott (Nobel Prize 2004 for Real Business
Cycle Theory)
Some Observations on the Great Depression (1999)
The Marxian view is that capitalistic

economies are inherently unstable

and that excessive accumulation of capital
will lead to increasingly severe economic
crises.
Growth theory, which has proved to be
empirically successful, says this is not true.
The capitalistic economy is stable, and absent
some change in technology or the rules of the
economic game,
the economy converges to a constant growth
path

Is Capitalism Stable or Unstable?

The heterodox Minskian Alternative: Hyman Minsky
(1969)
In this "Chicago" view there exists a financial system,
different from that which ruled at the time of crisis but
nonetheless consistent with capitalism, which would
make serious financial disturbances impossible
The alternative polar view, which I call unreconstructed
Keynesian,
is that capitalism is inherently flawed, being
prone to booms, crises and depressions.
This instability, in my view, is due to characteristics
the financial system must possess if it is to be
consistent with full-blown capitalism.
Such a financial system will be capable of both
generating signals that induce an accelerating desire to
invest and of financing that accelerating investment.
(Minsky 1969 [1982, p. 224])

A contest of ideologies, or logic?

A logically incontestable starting point: working from
identities
Output

Employment
EmploymentRate
LabourProductivity
Population

Wages
WagesShare
Output Cant be disputedjust definitions
Can only dispute relevance
Debt
Neoclassicals dispute relevance of 3rd
DebtRatio
definition
Output

Fisher's idea was less influential because of the

counterargument that debt-deflation represented no
more than a redistribution from one group (debtors)
to another (creditors).
Absent implausibly large differences in marginal spending
propensities among the groups, it was suggested, pure
But
redistributions
is this valid? should have no significant macroeconomic effects)

A contest of ideologies or logic?

Minsky asserts a key role for private debt:
The natural starting place for analyzing the relation
between debt and income is to take an economy with
a cyclical past that is now doing well
Lets consider. Putting those 3 identities into dynamic form
yields:
The employment rate will rise if economic growth
exceeds the sum of growth in labor productivity and
population growth;
The wages share of output will rise if wage
demands exceed the growth in labor productivity;
and
R if
Y

The private debt to GDP ratio

will
rise
private
debt growth exceeds the rate of economic growth
R
w
In equations

D
YR
d

A contest of ideologies or logic?

Simplest possible model of this:
Output YR a linear function of capital KR
Investment IR a linear function of profit rate r (&
depreciation)
Employment a linear function of output
Wage change a linear function of employment rate
Change
to investment
minus profits

in
debt
r d equal

N
S

&
KR Some

& S N

fundamental
nonlinearities
apply
r d
1

r d

d& S
N 1 r d d
v

v
v

KR

A contest of ideologies or logic?

A model of capitalism without bankers behaving badly:
Pure free-market system
No government sector, no Ponzi Finance, no
bankruptcy
Nothing to reform away if there are problems
Model has two main equilibria:
Good equilibrium:
Positive employment rate & wages share of output
Finite debt ratio
Bad equilibrium:
Zero employment rate & wages share of output
Infinite debt ratio

Two possible outcomes

(1) Convergence to good equilibrium
Stable system
(Linear
functions)
Wages
Employment
Private
Share
Debt
of Rate
Ratio
Output

P ercent
of GofD G
P Dper
year
P ercent
Pemployed
P ercent
of population

100
66
80

64
90
60
62
80
40
60
70
20
58
60
0
56

54
50
20
00
0

50
50
50

100
100
100

www.debtdeflation.com/blogs
www.debtdeflation.com/blogs
Stable

150
150
150

200
200
200

Two possible outcomes

(2) Convergence to bad equilibrium after apparent
Unstable system (Linear functions)
moderation
Wages
Employment
Private
Share
Debt
of Rate
Output
Ratio
Percent
of GDP
Percent
of GDP
peremployed
year
Percent
of population

120
400
70

300
100
65

200
60
80
100

55
60
0

100
50
40
000
Unstable

20
20
20

40
40
40

60
60
60

www.debtdeflation.com/blogs
www.debtdeflation.com/blogs
www.debtdeflation.com/blogs

80
80
80

100
100
100

Weve seen this beforein complex

systems

Property of Lorenz chaotic model of fluid flow This

800
behaviour
cannot be
generated
Decreasing
by
600
followed by
standard
increasing
equilibriu
turbulence
m-oriented
400
linear
model
Inherent
200
nonlinearit
y & non Convergence to
equilibriu
laminar flow
0
m
dynamics
are
200
essential
0
5
10
15
20

Genesis of the Keen/Minsky/Goodwin

model

Objective of my
1995 JPKE
paper was to
model Minskys
Financial
Instability
Hypothesis
Original paper
written in
August 1992
Well before
Neoclassicals
discovered (and
misinterpreted)
the Great
Moderation

Emergent Phenomena: Diminishing

cycles then crisis

Model had completely

unexpected dynamics
0.7
Debt crisis, as
0.2
expected
But apparent
0.15
tranquillity beforehand
Pure free-market
Share
0.1
capitalism trappedBank
in a
vortex of rising debt?
Inspired
what I thought at 0.05

the time was a nice

rhetorical flourish
0
The chaotic dynamics
explored in this paper
should warn us against
accepting a period of
relative tranquility in a
capitalist economy as

Wages
Instability at 4.6%
0.9
0.8

0.9
0.8
Employment
0.7

Economic implications of model

Real-world implications of the model:
If there was decreasing volatility in inflation &
employment
And the private debt to GDP ratio was stabilizing
Then Prescott was right
Economy is bound for equilibrium & stable growth
If there was decreasing volatility in inflation &
employment
And the private debt to GDP ratio was increasing
Then Minsky was right
Economy is bound for systemic breakdown; and
Crisis will be preceded by period of apparent
stability in employment & inflation
What does the data show?
There were two boom-bust crises in capitalism in last
century
1920-40, 1980-Now

Emergent Phenomena 1: Diminishing

cycles then crisis

Both had declining volatility before the crisis

1980-Now:
1920-40: Diminishing
Diminishingcycles,
cycles,then
thenBreakdown
Breakdown
16
30

Crisis

Crisis

14
25
12
20

Percent
Percent

10
15
8
10
6
5
4
0
2

5
0

10
2

Inflation
Unemployment

Inflation
Unemployment

15
4
1920 19821922
1980
1984 19861924
1988 1990
19261992 1994
19281996 1998
1930 20001932
2002 2004
1934
2006 2008
1936
2010 2012
19382014 2016
1940

www.debtdeflation.com/blogs

Emergent Phenomena 1: Diminishing

cycles then crisis

Both also had rising private debt, followed by deleveraging

1920-40: Rising
1980-Now:
RisingDebt,
Debt,then
thenDeleveraging
Deleveraging

Percent of GDP

140
160

Debt Ratio
Debt Change

Crisis

Crisis

80
80
70
70

130
150

60
60

120
140

50
50

110
130

40
40

100
120

30
30

90
110

20
20

80
100

10
10

70
90 0

00

60
80

10
10

50
20
70
20
1920
1926
19281996 1998
1930 2000 1932
1934
1936
19382014 2016
1940
1980 19821922
1984 19861924
1988 1990
1992 1994
2002 2004
2006 2008
2010 2012

www.debtdeflation.com/blogs

Percent of GDP change per year

150
170

Emergent Phenomena 1: Diminishing

cycles then crisis

Linear, equilibrium framework of mainstream economists

led them to
(1) Dismiss Great Depression as due to policy mistakes
Let me end my talk by abusing slightly my status as
an official representative of the Federal Reserve.
I would like to say to Milton and Anna:
Regarding the Great Depression.
You're right, we did it.
We're very sorry.
But thanks to you, we won't do it again. (
Bernanke 2002)
(2) Interpret Great Moderation as due to their good
management
The sources of the Great Moderation remain
somewhat controversial, but as I have argued
elsewhere,
there is evidence for the view that improved control

Emergent Phenomena 2: Rising

inequality

Other emergent aspects of model

Models system states are
Employment rate ()
Debt ratio (d)

Wages share of output () e N 0

S
Models equilibria are
S v S
N

Employment rate ()
de v
0

S
Debt ratio (d)
v2
Profit share of output () se v N 0
S
Wages share directly

d
e
se
e
negatively related to debt
Relationship
ratio
persists in model dynamics
If model converges to good equilibrium, then inequality
stabilizes
If model diverges to bad equilibrium, then inequality
rises
Falling workers share offsets rising bankers share

Simple rules, complex behaviour

Best seen in full price model with nonlinear behavioural
functions
Generated by generalizing earlier identities to include
inflation:
The employment rate will rise if real economic growth
exceeds the sum of population growth and growth in
labor productivity;
The wages share of output will rise if money wage
demands exceed the sum of inflation and growth in
labor productivity; and
The private debt to GDP ratio will rise if the rate of
growth of private debt exceeds the sum of inflation
plus the rate of economic growth.
Additional equations needed for
Rate of inflation
Lagged convergence to equilibrium prices in
monetary economy

Simple complex systems model

Slightly more complicated but still simple model (in

equations)
s 1 t r t d t ; r s
v
r t if inflag
Inflation-adjusted
nominal
interest
t 0,rb inf
lag t ,rb rate

st

1
1

inf
t

determines

order time lag

inflation
1

P
1 d

dt

Ifn r

Kr

1 d
waffects
inf t share
Inflation
fn wages
dt
Ifn r

s
debt

v affects
Ifn r growth

1 d

Inflation
d

Kr inf t

d dt
d
v

inf t
1
d
1
inflag t rate

reaction
1
to inflation
Lagged
interest
inflag t dt
inf
inflag t

Simple complex systems model

MinskyPrivateOnlyBreakdown.mky

The same model in Open Source system dynamics program

Minsky:

Rising inequality & crisis (full nonlinear

price model)

Falling workers
share

Capitalist are
the last ones
to know that
capitalism is
coming to an
end

Offsets rising bankers share

Crisis because the mainstream ignores

private debt

Employment, inflation & profit give no warning of crisis:

Private debt ratio is the key indicator of impending crisis

Crisis because The Left ignores private

debt too

There is no tendency for the rate of profit to fall

There is a tendency for private debt to grow
exponentially

Crisis because the mainstream ignores

private debt

Key implication of model

Level of private debt a key factor in macroeconomics
Too high a level of debt will cause a crisis
Private debt ratio should be a key macroeconomic
target
But economic mainstream rejects importance of debt:
The idea of debt-deflation goes back to Irving Fisher
(1933)
His diagnosis led him to urge President Roosevelt to
subordinate exchange-rate considerations to the need
for reflation
Fisher's idea was less influential in academic circles,
though, because of the counterargument that debtdeflation represented no more than a redistribution from
one group (debtors) to another (creditors).
Absent implausibly large differences in marginal
spending propensities among the groups, it was

Crisis because the mainstream ignores

private debt

Mainstream persists in ignoring private debteven after

2008 crisis:
Krugman rejects Koos balance sheet recession
argument:
Maybe part of the problem is that Koo envisages an
economy in which everyone is balance-sheet
constrained, as opposed to one in which lots of
people are balance-sheet constrained.
Id say that his vision makes no sense: where there
are debtors, there must also be creditors, so there
have to be at least some people who can respond to
lower real interest rates even in a balance-sheet
recession. (Krugman 2013)
Stiglitz lambasts banks for not facilitating lending:
While our banks are back to a reasonable state of
health, they have demonstrated that they are not fit
to fulfill their purpose...

Crisis because the mainstream ignores

private debt

Check the level of private debt

Private Debt to GDP Ratios

240
220
200

Percent of GDP

180
160
140

USA
UK
Euro Area
Australia
Japan
China

120
100
80
60
40
20
0
1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

BIS data: http://www.bis.org/statistics/totcredit.htm

2010

2015

2020

Crisis because the mainstream ignores

private debt

Rate of growth of credit is low to negative because level is

so high
Private Debt Growth
45
40

Percent of GDP per year

35
30
25
20

JapanCrisis

USA
UK
Euro
Aust.
Japan
China

GFC

15
10
5
0

0
5
10
15
1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

BIS data: http://www.bis.org/statistics/totcredit.htm

2010

2015

2020

Crisis because the mainstream ignores

private debt

Mainstream see banks as intermediaries, not

originators of loans
Think of it this way: when debt is rising, its not the
economy as a whole borrowing more money.
It is, rather, a case of less patient peoplepeople who
for whatever reason want to spend sooner rather than
laterborrowing from more patient people. (Krugman
2012, pp. 146-47)
The Bank of England knows better:
Whenever a bank makes a loan, it simultaneously
creates a matching deposit in the borrowers bank
account, thereby creating new money. (Bank of England
2014, p. 14)
Mainstream cant see why this matters:
OK, color me puzzled. Ive seen a number of people
touting this Bank of England paper as offering some
kind of radical new way of looking at the economy

Crisis because the mainstream ignores

private debt

Lending as a pure redistribution; bank as intermediary

Assets
Reserves
Lending
Paying interest
Repaying

Liabilities
Saver

Investo
r

Equity
Bank

Nothing
From
To
on Asset Shuffling $ on Liability Side
To
From
Side
To

From

Lending
as originator of loans
Bank Fee as
for money
arrangingcreation; bank From
To

Assets
Liabilities
Equity
&
Reser Loan Saver Investo
Bank
ves
s Liabiliti
r
Lending
From es Rise To
Assets From
Paying interest
To
&
IsRepaying
To
Fromclaims?...
there no essential difference,
as Krugman
Liabiliti
es Fall
loan

Assets

Loanable Funds vs Endogenous Money

LoanableFunds.mky

Modelling this in Minsky:

Loanable Funds vs Endogenous Money

Change banks from Intermediators to Originators

Loanable Funds vs Endogenous Money

EndogenousMoney.mky

Is it any different?

Loanable Funds vs Endogenous Money

Why is it so different?
Loanable Funds:
Banks intermediate between savers & investors
No creation of money by lending
No creation of additional demand either
Endogenous money:
Banks originate loans to investors (& speculators)
Money created by lending
Additional demand created
Change in Debt thus adds to demand
But how to reconcile this with
ExpenditureIncome identity?...

Loanable Funds, aggregate demand &

income

Consider 3 sector model with sectors S1, S2, S3

Expenditure not debt-financed shown by CAPITAL
LETTERS
Debt financed expenditure shown by lowercase letters
3 situations considered
Borrowing not possible
Borrowing from other sectors possible (Loanable
Funds)
Borrowing from banks possible (Endogenous Money)
First
Activity
Net Income
case Says Law (actually demand
creates its own
supply)
Sector Sector 1
Sector 2
Sector 3

Sector -(A + B)
A
B
1
C
-(C+D)
D
Expenditure Sector
(Exp.)
2
Negative sum of diagonal elements is aggregate demand
Sector
E
F
-(E+F)
Sum of off-diagonal elements is aggregate income
3

Loanable Funds, aggregate demand &

income

Clearly Expenditure Income:

ADSL A B C D E F
AYSL A B C D E F

Loanable Funds: Sector 1 borrows b from Sector 2 to spend

on Sector 3
Sector 1s funds for spending increase by b
Sector 2s funds fall by b (split 50:50
between S1 & S3
Activity
Net Income
for simplicity)
Sector Sector 1
Sector 2
Sector 3

Sector
-(A +
A
B+b
1
B+b)
Expenditure Sector
C-b/2
-(C+D-b)
D-b/2
(Exp.)
2
Aggregate outcome clearly the same as without borrowing
Sector
E
F
-(E+F)
Sound logical basis of Bernankes Absent implausibly large
3
differences in marginal spending propensities among the
groups, it was suggested, pure redistributions should

Endogenous money, aggregate demand

& income

But what if a bank lends to Sector 1?

Assets & liabilities of banking sector rise equally; and
Increased spending power for Sector 1 not offset by fall
in Sector 2
Causes
Sector 1s spending, andNet
incomes
of
Bank a rise inActivity
Income
Sectors
Assets2 & 3

Loans

Secto S1
S2
S3
r
S1
A
B+b
b
ADEM A B b C D(A+B+b)
E F

S2
C
D
AYEMExpenditure
A BbC D E F
(C+D
0
(Exp.)
Aggregate outcome
greater (if b>0) than without)borrowing
S3
EincreaseFin
Increase in debt causes equivalent
0
(E+F
expenditure
and income
)

Endogenous money, aggregate demand

& income

Reconciliation with ExpenditureIncome identity

Expenditure is the sum of
Expenditure financed by turnover of existing money
Measuredhowever poorlyas GDP (Expenditure
method)
Dimensioned in $/Year
Plus expenditure financed by new debt
Measuredmore accuratelyas Change in Debt
Dimensioned in $/Year
d
Plus gross financial transactions
(debt
AD V M
D&rdeposit
M rL D

D
dt
interest)
Income
side of identity needs amendment too:
Total
expenditure
therefore
Vast
majority
of debtistoday
finances asset purchases
Modern monetary theory must integrate
macroeconomics & finance
d
d
Income
GDPside
is
P therefore
K V M Income
D r M
plus
r Dcapital gains
Y

dt

dt

Endogenous money, aggregate demand

& income

GDP & capital gains are both affected by change in debt

GDP growth and change in capital gains affected by debt
acceleration
d
d
d
d

GDPY

dt

dt

PK K

V M D rD M

dt
dt

rL D

Change in debt by far most the volatile element on

expenditure side
Logical basis for extraordinary empirical correlations
between
Change in debt & economic activity (employment
rate, etc.)
Acceleration in debt and change in economic activity
Acceleration in debt and change in asset market
prices
Empirical findings contradict mainstream macro & finance
theory
Rather than changes in debt being pure redistributions
with no significant macro-economic effects, changes

Change in Debt & Economic Performance

Change in debt & unemployment 1980-Now
18

12

16

11

14

10

12

10

03

2
4

Debt Change
Unemployment

6
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

www.debtdeflation.com/blogs

Percent of workforce

Percent of GDP per year

US Private debt change & unemployment (Correlation -0.64)

Change in Debt & Economic Performance

Acceleration in debt & change in unemployment 1980-Now
8

80

60

40

20
00

0
2

20

40

60

80

10
12

Debt Acceleration
Unemployment Change

100
120

14
140
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

www.debtdeflation.com/blogs

Percent change per year

Percent of GDP per year per year

US Private debt acceleration & unemployment change (Correlation -0.8)

Change in Debt & Asset Market

Performance
5

15

12

00

Mortgage Acceleration
House Price Change

12

5
15
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

www.debtdeflation.com/blogs

Percent change per year

Percent of GDP per year per year

Acceleration in mortgage debt & house price change 1980NowUS Mortgage acceleration & House Price Index change (Correlation 0.7)

Change in Debt & Asset Market

Performance

Acceleration in margin debt & SP500 change 1980-Now

2

60

1.6

48

1.2

36

0.8

24

0.4

12
00

0
0.4

12

0.8

24

1.2

36

1.6

Margin Debt Acceleration

SP500 Change

48

2
60
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

www.debtdeflation.com/blogs

Percent change per year

Percent of GDP per year per year

US Margin Debt acceleration & SP500 change (Correlation 0.49)

Change in Debt & Asset Market

Performance

7500
2.5
7200
2.4
Shanghai Index
6900
2.3
6600
2.2
Margin Debt
6300
2.1
6000
2
5700
1.9
5400
1.8
5100
1.7
4800
1.6
4500
1.5
4200
1.4
3900
1.3
3600
1.2
3300
1.1
3000
1
2700
0.9
2400
0.8
2100
0.7
1800
0.6
1500
0.5
1200
0.4
900
0.3
600
0.2
300
0.1
0
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

www.debtdeflation.com/blogs

Margin debt as percent of GDP

Shanghai Index

From one of the oldest capitalist markets to one of the

newest
Shanghai Index & Margin Debt

Change in Debt & Asset Market

Performance

This crash is margin-debt-driven, unlike previous one in

2008Shanghai Index Monthly Change & Margin Debt Acceleration (Corr 0.46)
1.6

M axM argin

28
24

1.4
1.2

20
16

1
0.8

12
8

0.6
0.4

4
0

0.2
00

4
8

0.2
0.4

12
16

0.6
0.8

20
24
28
32
2014

Index Change
Margin Debt Acceleration
2014.25 2014.5 2014.75

2015

1.2
1.4
2015.25 2015.5 2015.75

2016

2016.25 2016.5 2016.75

Percent change per month per month

Percent Change in Index per month

32

1.6
2017

www.debtdeflation.com/blogs

Minskian analysis explains what mainstream cannot

comprehend
Built using an approach the mainstream explicitly rejects

Implications for economic theory

Minskian economics violates all mainstream methodological
rules: Mainstream New Keynesian Heterodox/Minsky/Keen
Derivatio Methodological Individualism
n

Process

Structural Top-Down
Identities

Economics is about
whatindividualsdo: not classes,
not correlations of forces, but
individual actors.
This is not to deny the relevance
of higher levels of analysis, but
they must be grounded in
individual behavior.
Methodological individualism is of
the essence. (Krugman)

Men make their own

history, but they do not
make it as they please;
they do not make it under
self-selected circumstances,
but under circumstances
existing already, given and
transmitted from the past.
(Marx)

Methodological Equilibration

Complex systems dynamics

I am basically a maximizationand-equilibrium kind of guy. (

Krugman)

Any system transforms

itself simply by its mere
working and if history
teaches us nothing else it
teaches that.

Monetary complex systems theory as the basis for a new

Implications for economic policy

In general: Pure free market capitalism is inherently
unstable
Capitalism needs fiat as well as credit money to avoid
debt crises
In particular: Not secular stagnation but stagnant credit
Private debt must be reduced without reducing
aggregate demand
Could be done by Peoples QE
Existing QE buys assets from pension funds, insurance
funds
Creates money for entities that primarily buy assets
Inflates asset priceswhich excess leverage has
already inflated
Small spillover effect into non-FIRE sectors of
economy
Peoples QE could
Use Bank of England capacity to create money to inject

Implications for economic policy

Ultimate objectives
Reduce private debt to safe zonewell below 100% of
GDP
Redesign banking to reduce Ponzi lending in
mortgages & shares
The PILL: Property Income Limited Leverage
Ban Margin Lending (no credit cards in the
casino)
Encourage Schumpeterian lending
EELs: Entrepreneurial Equity Loans
Current political likelihood of above reforms?...

Implications for economic policy

And if we dont reduce private debt?
Then we will turn Japaneseminus its trade surplus &
fiscal policy:
Private Debt to GDP Ratios
240
220
200

Percent of GDP

180
160
140
120

USA
UK
Euro Area
Australia
Japan shifted to GFC
China

100
80
60
40
20
0
1980

1985

1990

1995

2000

2005

2010

2015

2020

BIS data: http://www.bis.org/statistics/totcredit.htm

2025

2030

2035

Implications for economic policy

Not secular stagnation but credit stagnationfor 2
decades:
Future credit growth without People's QE?
45

GFC

USA
UK
Euro
Aust.
Japan shifted to GFC
China

40

Percent of GDP per year

35
30
25
20
15
10
5

0
5
10
15
1980

1985

1990

1995

2000

2005

2010

2015

2020

BIS data: http://www.bis.org/statistics/totcredit.htm

2025

2030

2035

Implications for the immediate economic

future

Crash in China inevitable: Debt growth 3 times US rate,

level close to Private
Japan Debt
peak
Bubbles from inception to crash
240

JapanCrash USA Crash

230

China since 2009

USA since 1993
Japan since 1980

220
210

Percent of GDP

200
190
180
170
160
150
140
130
120
110
100

10

15

20

25

www.debtdeflation.com/blogs

30

35

40

Implications for the immediate economic

future

End of China bubble will remove aggregate demand

equivalent to China GDP from global economy
Private Debt Bubbles from inception to crash

45

JapanCrash USA Crash

40

China since 2009

USA since 1993
Japan since 1980

35

Percent of GDP

30
25
20
15
10
5

0
5
10
15
20

10

15

20

25

www.debtdeflation.com/blogs

30

35

40

Implications for economic pedagogy

A Rethinking and Re-Learning of Economics is needed
Learn Neoclassical economics well
Warts and all (not the airbrushed textbook version)
As a (hopefully passing) phase in the history of
economic thought
Learn other existing schools well too: none have complete
alternative
Austrian, Marxian, Post Keynesian, Evolutionary,
Ecological, Feminist
Learn complex systems approaches & thermodynamics
But you wont find that curriculum at Oxford orKingston
Cambridge!
For
S0 a pluralist education in University

economics

Come to

London