Act: Resources

Economics in the Post-Neoclassical Era

May 16, 2017

I’m generally regarded as a Post-Keynesian economist, a term that the original founders of that movement (Joan Robinson, Paul Davidson, Sidney Weintraub, Alfred Eichner and many others) used to distinguish themselves from the dominant Hicks-Samuelson interpretation of Keynes, which was a bastardisation of Keynes’s attempt to orient economics towards realism rather than fantasy.

A better term would have been True Keynesian (though unfortunately that term implies a level of cultism), since what passed as Keynesian economics was an attempt to graft some of Keynes’s ideas onto the Neoclassical school that he was rebelling against.

Eighty years after Keynes, we’re in another debt-deflationary trap, led there to large degree by the fallacious Neoclassical assimilation of him. Now even some once prominent Neoclassicals are beginning to realise that there is something wrong with their theory.

The attempt to finally break from that persuasive but flawed theory may fail as did Keynes’s, because the appeal of its simplistic philosophy is very strong to believers, and they are largely immune to criticism within the University system that reproduces them. But there is some hope that our modern knowledge of complex systems, and our capacity to model nonlinear far from equilibrium dynamics (and to some extent, evolution) might enable a realistic analytic alternative economics to develop.

I call that post-Neoclassical economics in this video, using “post” in its usual sense of “after”, rather than the protest movement Post Keynesian economics represented.

One reason that the Neoclassical School is so resilient to criticism is that it has a theory of value that provides its believers with a frame of reference that is both a core set of beliefs, and a means to generate coherent arguments across a wide range of topics. Post Keynesians deliberately eschewed that, and I think this is one reason they failed.

I have personally operated with an alternative theory of value, derived from an interpretation of Marx that has made me, if anything, more unpopular with Marxists than I am with Neoclassicals. In this talk, I give a brief outline of that dialectical theory of value, and align it with the recent work I’ve done on energy and production.

Of course I can’t cover all the background to these two issues in a brief presentation, so I’ve linked to  two papers to this post: my original and still unpublished thesis on Marx, and another unpublished paper on how this could provide an intellectual foundation for Post-Keynesian–and now post-Neoclassical–Economics.

Steve Keen

Steve Keen is a Distinguished Research Fellow at UCL, the author of The New Economics: A Manifesto (2021), Debunking Economics (2011) and Can We Avoid Another Financial Crisis? (2017), and one of the few economists to anticipate the Global Financial Crisis of 2008, for which he received the Revere Award from the Real World Economics Review. His main research interests are the complex systems approach to macroeconomics, and the economics of climate change. He has over 80 refereed publications on financial instability, money creation, logical and mathematical flaws in conventional and Marxian economic theory, the role of energy in production, and many other topics. He is ranked in 19th in Academic Influence’s list of influential economists. This is his Google Scholar site. He designed the Open-Source system dynamics program Minsky, which is the first program to allow monetary economic models to be designed visually. He is about to release a commercial business intelligence program built on top of Minsky called Ravel©™. He has previously been Professor of Economics at Kingston University London and the University of Western Sydney, Australia. He is active on Twitter as @ProfSteveKeen, and is crowdfunding his non-mainstream research into economics via Patreon and Substack. He is now offering a set of “Mastermind” lectures via the site

Tags: new economy, post-neoclassical economics