Steve Keen
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Dr Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. He criticizes both modern neoclassical economics and (much of) marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include: the American Hyman Minsky, the Italian Piero Sraffa and the Austrian Joseph Alois Schumpeter. His website regularly rates among Yahoo's Top 50 Most Visited Economics Websites and his work has been published and discussed in leading academic journals, like Physica A and Nature (see Weblinks section below).
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[edit] Keen's critique of neoclassical theory
Keen has presented a mathematical critique of the invalidity of the neoclassical marginal pricing theory. A published version of this work can be found at [1]. Keen's full-range critique of Neoclassical Economics is contained in his book "Debunking Economics". However, his conclusions have been dismissed by neoclassical economists and there is an ongoing debate about this.
In support of his results, Keen cites empirical research beginning as early as the Eiteman & Guthrie (1952) paper on marginal costs and marginal revenue in real firms, which shows that 89% of firms do not behave as the neoclassical model would suggest. The latest research on this includes Alan Blinder's research on marginal costs and marginal revenue in real firms, which is also is in support of Keen's critique (see below).
Prof. Keen is not the only critic of neoclassical economics. Different schools of economic thought were largely prompted by the perceived deficiencies of it. However, in a survey of various schools of, so-called, heterodox economics, e. g. evolutionary economics, Austrian economics etc., Keen writes: None of these is at present strong enough or complete enough to declare itself a contender for the title of ‘the’ economic theory of the 21st century. According to Thomas Kuhn and the extended falsificationism of Imre Lakatos, the existence of different schools of thought is a prerequisite for a paradigmatic shift in a science. However, Lakatos also points out that, whether such a shift is actually necessary does not depend on the existence of competing paradigms, but rather on whether the research program of a science is progressive or degenerative (see here for more on these concepts). In his book "Debunking Economics", Keen asserts, that the neoclassical research program is degenerative, because it does not generate new knowledge and has instead a growing belt of protective auxiliary hypotheses to shield its core beliefs from critique.
Hence, Prof. Keen's point of view can be summarized as follows: A paradigm shift in mainstream economics, specifically Neoclassical Economics, has to take place, as soon as at least one of the competing schools of economic thought is complete enough to stand alone as an economic theory. Neoclassical economists would of course disagree--though some, like Alan Kirman, concur on the need for change.
[edit] Books
Steve Keen's books include:
- Debunking Economics: The Naked Emperor of the Social Sciences (2001, Pluto Press Australia) ISBN 1-86403-070-4
Debunking economics has the interesting feature of being written for a lay audience, but with an accompanying web site which provides more detailed mathematical expositions for experts.
- Also a co-editor of: Commerce, Complexity and Evolution: Topics in Economics, Finance, Marketing, and Management: Proceedings of the Twelfth International Symposium in Economic Theory and Econometrics. New York: Cambridge University Press. ISBN 0-521-62030-9.
[edit] See also
- Heterodox Economics
- Paul Ormerod
- Eiteman & Guthrie (1952): The shape of the average cost curve, American Economic Review 42: 832-838.
- Blinder, Alan; et al. (1998): Asking about prices: a new approach to understanding price stickiness, Russell Sage Foundation, New York.
[edit] External links
- Academic website
- Website of "Debunking Economics"
- There is madness in their method A sample chapter.
- Keen's Physica A article on the invalidity neoclassical economic theory of the firm.
- A more detailed presentation of the contents in the Physica A article.
- A news feature on an Econophysics paper co-written by Prof. Keen appeared in the journal Nature, accompanied by an editorial.
