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Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?

4.02  ·  Rating details ·  496 Ratings  ·  45 Reviews
Debunking Economics (Revised and Expanded Edition), now including a downloadable supplement for courses, exposes what many non-economists may have suspected and a minority of economists have long known: that economic theory is not only unpalatable, but also plain wrong.

When the original Debunking Economics was published in 2001, the market economy seemed invincible, and c
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Paperback, 496 pages
Published September 1st 2011 by Zed Books (first published 2001)
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Whitaker
Update (3 December 2011)

Steve Keen's done an excellent interview with BBC Hard Talk. Check it out on his author profile. In summary, he explains that the last 30 years of growth have been fueled by a credit bubble where banks basically went wild making money from lending. Where credit is used to fund speculation (i.e., making money from the increase of asset prices as opposed to funding new business ventures), it's a Ponzi scheme. We were assured by the economists it was all stable because the b
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Sean Fernyhough
Nov 02, 2011 rated it it was amazing
"Thirty years ago I experienced a highly conventional education in Economics. I always had an immense difficulty in reconciling the irreconcible; the economics inside the lecture theatre and the seminar room with that in the outside world. Without the internet and books like Debunking Economics it would have taken extraordinary luck and perseverance to find the literature I needed to counteract the wrongheadedness of what I was being taught. I can even recall one of our lecturers saying that it ...more
Hadrian
This deserves a longer and more in-depth review than I can provide right now (or perhaps ever). Safe to say that Keen is vicious in his aim to dethrone neoclassical economics - anything they produce is either nonsensical, absurd, or that the author should be institutionalized (his words). His reasoning is equally savage, however, and that is where this book should be studied.

More comments should follow after I finish up a few projects elsewhere and complete J R.
Munthir Mahir
Mar 19, 2016 rated it liked it
First off I stopped reading past chapter 9. This book covers a subject that is huge (a whole social science field) and that is the problem. The book is one too many things; it talks to too many audiences about too many topics using too many tools. It reads like a textbook, scientific paper, dissertation and a non-fiction book all at once. It certainly requires great concentration to follow the ancillary comments and supplements. It is not organized in a manner that is easy to follow because of t ...more
Tadas Talaikis
Dec 27, 2016 rated it it was amazing
This is excellent read and hard work for the brain. Highly complex, it is hard to abstract into one sentence, but I think more appropriate would be following: "economics is complex dynamic system, so it is unwise to model it with oversimplified static models." (free quote)

"(...) Thus ‘labor-intensive’ industry III, with a labor-to-capital ratio of 2:3, earns the highest ‘value’ rate of profit of 40 percent, while ‘capital-intensive’ industry V, with a 1:20 ratio, makes a ‘value’ rate of profit o
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Grig O'
Feb 16, 2014 rated it really liked it
Shelves: kindle
5 stars for content, 3 stars for presentation.

While Keen's intent to present complex facets of economics in layman terms is certainly laudable, his efforts to bypass mathematical formulas at all costs by use of textual, tabular and graphic illustration (even if that occasionally means spelling out formulas in sentence form) sometimes go too far.

There's quite a bit of redundancy between chapters, as well as less-than-perfect mixes of the first (2001) edition and the revised (2011, post-crash) one
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Samson
Jul 01, 2015 added it
Shelves: non-fiction
I have to confess that I glaze over parts of the book because the material is just over my head. Not having taken even basic Economics 101 courses, things like demand curves, supply curves, indifference curves etc., are a bit hard to grasp, though I feel that the author has tried hard to explain them for laymen like myself. Having said that, I still got some good insights from the author's narrative:
1) Some fundamental assumptions that neoclassicals made on which their theories are built upon do
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Gregg Wingo
Mar 21, 2013 rated it it was amazing
This book is a fantastic critique of the neoclassical synthesis and an exploration into the world of heterodox economics. Keen bravely attacks static economics at its mathematical roots and assumptions, revives Marx' theory of value and crowns him the greatest of Classical economists, defends Keynes against his opponents and heirs, and introduces the elegance and irrationality of dynamic analysis into the inherent instability of the market.

The author succeeds in trashing the NeoLiberal argument
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Petter Nordal
May 21, 2013 rated it it was amazing
Every adult living in a democracy should read this book.

The next time someone tells you that rewards for the rich are the way to fix the economy, ask them what the relationship is between private debt and the supply curve. If they cannot answer (they will likely tell you that private debt is not an important factor in a capitalist economy--insane as that sounds) then you can whip out some Keen and leave them backpedaling. Even if they do answer, you will be prepared to pummel their simplistic,
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David
A crucial work for understanding the failures of neoclassical economics: For people, like me, who had almost given up entirely on the academic field of Economics because of ridiculous theories and poor teaching, there is fortunately still Steve Keen. In this book, the Australian Keen shows the errors of the standard views of neoclassical (orthodox) economics.

Not just some side aspects of the theory, but the actual core views of economics as it is taught in universities everywhere unravels befor
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Kevin Varney
I am only part way through at the moment, but he has convinced me. I've never studied economics properly but I have read a few books. It seems that neo-classical economics is a mathematical theory that relies on some assumptions, but the maths is wrong and the assumptions are unrealistic. Substituting an infinitesimal for zero seems like a really invalid thing to do in a mathematical equation. Then, if someone does deduce a grand theory as a thought experiment, someone else should at least be ab ...more
Trashy Pit
Stevey-boy is my kind of guy! He’s a super-expert on standard mainstream economic theory but he doesn’t buy any of it. If you choose to read only one book in your entire life on economics, don’t read one that tries to convince you that it all makes sense (much less a book that claims to “explain it all in simple language” or some other similar nonsense). Keen knows all the Economic Theories and all the arcane math they use to obfuscate the total absurdity of what they are saying, and he carefull ...more
Chad
Jan 24, 2014 rated it it was amazing
This is probably the single best economics book I have read, and I have read more economics books than is good for one's health. Keen does an excellent job of pulling back the curtain to show the true lunacy that sits underneath most of our economic dogma. From the insanity of perfect competition, to flaws in the theory of the firm (MC does not equal MR in any real world case) to the SMD issue with aggregating market demand curves, Keen details and debunks all of the flaws in the religious disci ...more
Emre Poyraz
Feb 18, 2011 rated it really liked it  ·  review of another edition
I agree with other reviewers that is book is one of the most accurate and brilliant criticisms of mainstream/neoclassical economics. Some of the points Mr. Keen makes are very original, and if you are looking for "ammo" to shoot at mainstream economics, this book will give you plenty.


However,I am not sure how much this book will appeal to the non-economist reader. Much of it is discussion of the existing economic theories, and without a knowledge of these theories, much of the book would be imco
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Ryan Melena
Mar 07, 2016 rated it really liked it
Debunking Economics offered an excellent and thorough dressing down of modern neoclassical economics. The author does so using the very same tools and mathematics that neoclassical economists hold up as proof of the correctness of their theories. He shows that more so than a science, and despite its own claims to the contrary, modern neoclassical economics operates as an ideology (or even a religion) that refuses to acknowledge its own shortcomings and inconsistencies. In addition to his fierce ...more
Muhammad al-Khwarizmi
Keen is brilliant but there are two problems with this book on my end: it assumes too little mathematical knowledge at the same time as it assumes too much knowledge of the neoclassical theory he is rebutting in general.

The result is often a confusing, hard and overly verbose slog. As much as I don't like pages and pages of equations like you see in some texts, I see what he's doing sometimes and wish he would just fill it in in a box set apart from the rest of the material. He has supplemental
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Miguel Buddle
May 19, 2015 rated it really liked it
Fascinating book. It would have helped to have more of a grounding in economics at even the undergrad level, but slow consumption and re-reading make this possible because of Keen's clear language. My basic takeaway is that all of those things that seem a bit ridiculous about economics (perfectly rational consumers, assumed equilibrium) are actually, provably ridiculous. The why and how was definitely the interesting part here.
Justin
Jan 13, 2012 rated it it was amazing
A manifestly important book. It's hard to capture the scope of Keen's work — his erudition of the real history of economic thought and demolition of the neoclassical house of cards is breathtaking, exciting, urgently necessary.

If, like me, you sat in undergrad economics classes thinking (or even saying) 'but... huh?' then it may just be that you were quite capable of understanding what was being presented, it simply made no sense.

Eagerly await his next book.
JimZ
Jan 27, 2016 rated it it was amazing  ·  review of another edition
Shelves: economics
Students (and professors) of economics need to digest this somewhat technical book, and find a way to come to terms with Keen's points.
Matthias
This book was originally written after the dot-com crash, and got repackaged and remarketed right after the 2008 crisis. Nice wave-catching there.
I couldn't get past the series of strawmen about neoclassical economics: how good can your conclusions be if your premises are fallacious? Also, the prophetic tone was quite annoying (still less than Taleb's, tho).
Karl H.
Jun 17, 2012 rated it it was ok  ·  review of another edition
Debunking Economics is a non-Marxist, non-neoclassical portrait of the field of economics. It attempts to explain why economics is a field filled with unproven and erroneous assumptions. While his prediction of the present economic crisis is impressive, I feel the rest of the work is merely okay.

The style of Debunking Economics alternates in feel between an off-handed chumminess and the dryness of an economic textbook. The introductions and conclusions are too familiar in tone to feel impartial
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Elinor Hurst
Mar 29, 2013 rated it really liked it
This book was not an easy read, but it gets four stars from me as in many ways I found it an utter eye opener.

Steve Keen analyses and documents in methodical detail the flaws in neoclassical economics. While there are many other books that have done this before, his is the only one that I am aware of that takes the economic academic profession head on, and plays them at their own game. He exposes their flawed thinking and gross mathematical incompetence, which to anyone who has studied mathemati
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tom bomp
Sep 14, 2013 rated it it was ok
Shelves: paused
Not very clear or convincing. Constantly feel like I need a glossary (uses "marginal productivity", "marginal product of labour" and "marginal revenue product" near interchangeably for example. No idea what makes each different). I fully admit this is at least partially my own fault - it would be ridiculous to expect to understand a huge amount of economics just reading straight through. But I felt it could have been made easier. I felt often like I could see how a neoclassical economist would r ...more
Patrick
Aug 23, 2013 rated it liked it
Some Anvils Need to be Dropped

JDN 2456534 PDT 15:58.

A review of Debunking Economics: The Naked Emperor Dethroned? by Steve Keen.

The basic message Keen is trying to send is a vitally important one: Neoclassical economics is failing. Models based around rational agents and static equilibrium simply fail to represent the real world, and and as a result give policymakers a false sense of security against economic crisis.
The way Keen delivers this message is by avalanche: Page after page, chapter af
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Chuck
Apr 02, 2008 rated it it was amazing  ·  review of another edition
Shelves: economics
From a review by Joe McCauley

"This book provides a far more clear explanation of the ideas of standard economic theory (neo-classical economics) than do the standard texts (compare with Samuelson, Mankiw, or Barro, e.g.).

The book explains utility maximization, indifference curves, and the assumptions underlying the standard economic model that is used by the IMF, the World Bank and all major western governments. Keen uses simple language that even the lay person can follow. The text should be s
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John Schneider
Jun 01, 2016 rated it it was amazing
Although I am giving this book five stars, I have to alert any interested readers that this book gets technical. From time to time Prof. Keen will utilize very abstract thinking that will leave some people confused and/or fleeing from the book - he even admits to this by advising the reader to drink some coffee. Having given this major qualification, I must contend that this book is the thorough critique of economics since Marx's "Capital." Unlike Marx, however, Prof. Keen does not foresee a wor ...more
Kevin Vejrup
Oct 09, 2012 rated it did not like it
This review has been hidden because it contains spoilers. To view it, click here.
Michael
This book has the makings of an interesting and important polemic, but the writing style is too loose.

Many people may have trouble with his self-righteous tone, but as he was self-aware on this point, I found it tolerable.

What was intolerable was the rambling and repetition. All his chapters start with sections titled "Kernel" and "Roadmap" - don't bother reading those. Don't bother reading chapters 1, 11, 12, or 17 either. If you like graphs, then go to his website for the extra graphs, in whic
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Jamie Johnson
Sep 14, 2012 rated it it was amazing
First book I've read that's seriously looked at the assumptions underpinning the toppling edifice of macro-economics. It's no wonder the solutions don't work. Helicopter Ben may be pump-priming yet more cash into the vampire-squid's lair, but he's going to end up with a Japanese lost decade at the end. Hopefully after than the post-keynsians might actually be considered by the ivory tower mob. And I really liked the critique on Marx's labour theory of value. I've since seen some rebuttals, and n ...more
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Steve Keen is a professor in economics and finance at the University of Western Sydney. He classes himself as a post-Keynesian, criticizing both modern neoclassical economics and Marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Hyman Minsky, Piero Sraffa, Joseph Alois Schumpeter, and Fr ...more
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“The position I now favor is that economics is a pre-science, rather like astronomy before Copernicus, Brahe and Galileo. I still hold out hope of better behavior in the future, but given the travesties of logic and anti-empiricism that have been committed in its name, it would be an insult to the other sciences to give economics even a tentative membership of that field.1” 3 likes
“Have you heard the joke about the chemist, physicist and economist who get wrecked on a desert isle, with a huge supply of canned baked beans as their only food? The chemist says that he can start a fire using the neighbouring palm trees, and calculate the temperature at which a can will explode. The physicist says that she can work out the trajectory of each of the baked beans, so that they can be collected and eaten. The economist says "Hang on guys, you're doing it the hard way. Let's assume we have a can opener.” 2 likes
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