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Steve Keen: “On the Origins of Energy Blindness”

February 8, 2024

(Conversation recorded on December 14th, 2023)

Show Summary

On this episode, economist Steve Keen offers a deep forensic history of why modern economic theory has neglected the role of energy in productivity – and why this “Energy Blindness” is now a major blindspot in how our culture views the present – and the future.  The massive, temporary carbon surplus we’ve extracted over the last few centuries has resulted in an exponential increase in the standard of living for many. This explosion of global economic growth also happened to coincide with the development of all modern economic theories and formulas, leading to a core misunderstanding in the way our economies are powered. How have technology and innovation been used to cover up the role of a growing energy supply in the last century of rising prosperity? In the midst of discussions between value and labor, where does energy really fit into the equation? Where do we go once we understand the true role of energy in our economy – and will we have the ability to reshape economic policies to be in line with our energy realities?

About Steve Keen

Steve Keen is an economist, author of Debunking Economics and The New Economics: A Manifesto. His new book, Rebuilding Economics from the Top Down, will be released in 2024. He is a Research Fellow at the Institute for Strategy, Resilience, and Security at University College in London. Steve was one of the handful of economists to realize that a serious economic crisis was imminent, and to publicly warn of it from as early as December 2005. This, and his pioneering work on modeling debt-deflation, resulted in him winning the Revere Award from the Real World Economics Review.

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00:00 – Steve Keen works + info

03:42 – Classical Economics

03:51 – Adam Smith

04:01 – Physiocrats

04:35 – François Quesnay

06:49 – William Petty

08:35 – Richard Cantillon

12:09 – The Wealth of Nations

14:33 – History of the word energy

15:08 – David Ricardo

15:47 – Karl Marx

16:49 – Dark satanic mills, working conditions in industrialism

19:05 – Antoine-Augustin Cournot, Cournot oligopoly theory

19:23 – Jean-Baptiste Say

20:19 – Subjective Theory of Value

21:20 – Henry Rosovsky

23:04 – Capital Vol. 1

25:15 – Neoclassical economics

27:10 – A History of the Theories of Production and Distribution in English Political Economy from 1776 to 1848 By Edwin Cannan

27:44 – Marshall, Walras  and Jevons

28:05 – Cobb-Douglas Production Function

26:35 – Marginal productivity of labor, marginal productivity of machinery, J.B Clarke, marginal productivity of income distribution

30:10 – Cobb and Douglas

30:38 – Bureau of Economic Analysis

32:11 – Homogeneous production function

36:52 – Computer general equilibrium models

37:10 – New Classical Economists

37:19 – Keynesian economics

37:37 – Aggregate Production Function

37:52 – Solow, Solow Residual

49:49 – Lucas Critique

51:01 – Robert Ayres, Reiner Kümmel

51:47 – Leontief Production Function

55:19 – Musk, Space X

56:44 – Rüdiger Bachmann, What if? The Economic Effects for Germany of a Stop of Energy Imports from Russia

58:31 – Wassily Leontief

59:33 – Post-Keynesian 

1:00:27 – Constant elasticity of substitution

1:09:35 – BTUs in a barrel of oil

1:15:51 – Howard T. Odum, Charles Hall, Nicholas Georgescu-Roegen

1:17:59 – Anne-Robert-Jacques Turgot

1:22:51 – Climate Change

1:22:59 – William Nordhaus and work on climate (1991)

1:23:56 – James Hansen, Warming in the Pipeline

1:24:21 – El Nino, La Nina

1:26:36 – Wet Bulb Temperature

Nate Hagens

Nate Hagens

Nate Hagens is the Director of The Institute for the Study of Energy & Our Future (ISEOF) an organization focused on educating and preparing society for the coming cultural transition. Allied with leading ecologists, energy experts, politicians and systems thinkers ISEOF assembles road-maps and off-ramps for how human societies can adapt to lower throughput lifestyles. Nate holds a Masters Degree in Finance with Honors from the University of Chicago and a Ph.D. in Natural Resources from the University of Vermont. He teaches an Honors course, Reality 101, at the University of Minnesota.