Steve Keen: Marxism, Capitalism, and Economics | Lex Fridman Podcast
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- เผยแพร่เมื่อ 18 พ.ค. 2024
- Steve Keen is a heterodox economist and author. Please support this podcast by checking out our sponsors:
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OUTLINE:
0:00 - Introduction
1:51 - Defining economics
8:50 - Schools of economics
33:10 - Karl Marx
51:24 - Labor theory of value
1:11:10 - Socialism
1:26:12 - Soviet Union
1:39:33 - China
1:59:24 - Climate change
2:21:27 - Economics vs Politics
2:29:30 - Minsky's model
2:44:14 - Financial crisis
2:49:31 - Inflation
3:02:46 - Marxism
3:10:06 - Space and AI
3:16:11 - Advice for young people
3:20:02 - Depression
3:24:35 - Love
3:28:35 - Mortality
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Here are the timestamps. Please check out our sponsors to support this podcast.
0:00 - Introduction & sponsor mentions:
- Weights & Biases: lexfridman.com/wnb
- Skiff: skiff.org/lex
- Indeed: indeed.com/lex to get $75 credit
- NetSuite: netsuite.com/lex to get free product tour
- InsideTracker: insidetracker.com/lex to get 20% off
1:51 - Defining economics
8:50 - Schools of economics
33:10 - Karl Marx
51:24 - Labor theory of value
1:11:10 - Socialism
1:26:12 - Soviet Union
1:39:33 - China
1:59:24 - Climate change
2:21:27 - Economics vs Politics
2:29:30 - Minsky's model
2:44:14 - Financial crisis
2:49:31 - Inflation
3:02:46 - Marxism
3:10:06 - Space and AI
3:16:11 - Advice for young people
3:20:02 - Depression
3:24:35 - Love
3:28:35 - Mortality
What if the reason socialism fails is that you get the wrong people in charge of organizations. Under Capitalism its kind of survival of the fittest so the reason an organization is successful is because the organization is able to start up and maintain its success is because the people running are extremely competent and making the right decisions. Once the people running the organization start making bad decisions the organization gets pushed out by another one. So under socialism you get the people in charge appointed so its political not based on competence. You could end up with someone like Alexandria Cortez running your rocket company instead of Elon Musk. This could be the fundamental reason Socialism doesn't produce innovation or efficiency. So you need capitalism but it needs to be regulated by a government to cut out some of the abuses of pure capitalism. The problem comes in win the powerful capitalists corrupt the government, so the government is controlled by them rather than the government regulating the capitalists.
To many people who are living paycheck to paycheck There’s nothing more real or tangible than money and debt, and if you told some people that some guy walked on water and he came back to life many would say “that’s bullshit”, but if you told them there was more debt than there was money to pay the debts many of them would be confused having assumed that the most tangible and real thing in their lives, is a fraudulent magical system.
It’s a system which is much more than necessarily flawed, where cantillionaires are propped up by the money system who then use their money to buy the government to reinforce the system of oligarchy.
And in the end none of this is actually even good for the cantillionaires much less for the environment or the average person. Many of these same people talk about free markets and innovation and freedom and democracy but they hate all of these things.
Meanwhile the religions of the world have the right idea when it comes to economics - cancel the debts on jubilee as a way to restart the economies and the religions banned usury debts.
I don't know if you will see this, I want to thank you. This world would be a much darker realm of "unknowns" without your contribution.
I'm really enjoying this episode so far, just ten minutes in... Hopefully he mentions UBI, when talking about how consumer economies are doomed to fail, if the majority of consumers can't participate. Add in more automation... This is why direct Government investment of cash into each individual person is needed. Either a UBI or a Basic Income. The hidden benefits will manifest in ways that crime goes down, police don't need to be an occupying force in economically depressed areas, and new forms of tax revenues generated from more independent small businesses serving local needs... UBI is desperately needed. Millennials are less likely to have savings, IRAs, own homes... By 2034, the SSA Trust is out of money, meaning only $700 gets paid out for every $1000 due from SS retirement for people born after 1965...
Absolutely great that you got this severely underrated and historically great economist on. Thank you!
As an engineer, in the US Capitalist system, we designed appliances to fail, on purpose, shortening their life span, from 30-40 years, to 10 years. It is called design obsolescence. We put a tiny cheap part in these new appliances, as a design feature, so they fail. This new phenomenon is in monopolies, which have no competition, such as Whirlpool. They have bought up all competition, and don’t worry about losing market share, if their product is inferior. Design Obsolescence creates profits, while destroying our natural resources, as we put perfectly good appliances, in the landfill, so that a corporation can make profits. I find this practice unethical. And it is rampant in modern day Capitalism.
I think you should always buy the most expensive thing, that way everything you've ever bought will last forever. How's that titanium VCR running? You're not a engineer, you're a Leftist propagandists, be real to who you are. Anyone can buy a $30 sewing machine that's going to last 100 hours or spend $6,000 for one that will last 40,000 hours. Both are designed with planned obsolescence because it's stupid to make things no one wants or no one can afford.
And the funny thing is, I've known this for years so what I've been doing is noticing things that regularly break, for example my deep fryer's igniter keeps breaking every 6 months and the first time we had to call in a repair man, and he took couple hundreds for call out and basically swapped a little plastic knob. I went online and bought 20 of those knobs from Ebay and now when it breaks, I just replace it myself. It's crazy what people can do with a bit of tinkering.
There is a theory of capitalism that creates different incentives for manufacturers. Lets say for ex. the Whirpool and fridge or a washing machine. You dont buy the machine, you buy / rent a service of "I want this much space for a fridge and with these parameters", same for a washing machine. That gives companies different incentives.
I think it is a worthy and fascinating way of changing some industries within capitalism. As that is the main issue we face, incentives. They are set wrong on many levels.
Well there's also an input regarding how much people can or will pay for quality which can come at a price. I'm not sure which problem comes first, monopoly or thrift. But the first is a public issue and the second a private issue. The current system ignores the former while putting all the explanation on the later. It's fascinating how subjects like this, which are questions of engineering design, quickly become so ideological as to be theological.
@@conceptAIart You choose to buy more of the fragile cheap plastic knobs instead of a expensive steel knob. Your choice signals what to manufacture.
Lex, heading your finishing line again, that I’m a “Deadly Bastard”, literally made me laugh out loud.
It was a pleasure to talk with you. Thank you for the invitation (and the opportunity to indulge my inner geek, thanks to you, and see Starbase).
Well, he's half right.
Would love to hear you and Noam Chomsky or Richard Wolff talk. Thanks a lot for this discussion.
That was an enthralling journey Steve, thanks for being a fascinating guide.. Thanks Lex for the chance to join you on it...
interesting discussion on socialism and innovation, I wonder how you would integrate slave (and colonization) labor into the "capitalist" innovation? What is the nature of the "exploitation" that you didn't really dissect (somewhere around 129mins) ? This would have been interesting especially since you are an Australian British colony (what is that back idea of the common wealth)
Good to see an Aussie on the podcast.
I am amazed by Keynes mind because of the mental gymnastics he has to do to avoid facts presented to him by Austrians or just reality
The amount of people applauding this man is also outstanding.
Also surprising how he casually dismissed bitcoiners I. The same breath saying inflation and easy lending is a problem.
This is possibly the hardest podcast I’ve ever listened to
painful
So hard to keep all that terminology on my head at once
35 minutes in and 90% of what has been said is generally accepted basic economic definitions, with only his opinions on equilibrium vs stability really being at all controversial. Economics, as it exists, is a painful set of self-sustaining contradictions of reality. I think the best way to follow what’s being said is to accept that your likely well informed view of what reality is that you’ve built up over your lifetime has very little to do with the way modern mainstream economics. When words overlap from one to the other, it’s reasonable to assume a modern economist thinks it’s something incompatibly different.
What’s being argued here is largely common sense, in my opinion, but put into the language of modern economics and mathematics is essentially a separate language.
This podcast taught me more about economics than my entire undergraduate business curriculum.
The high sparrow from Game of Thrones has a side job as an economist. Who knew? Great conversation, as always.
LOLLLalL
Just like always- you think you have an original thought and someone else beats you to it!
I half expected him to take off his face halfway through to reveal that the real guest was in fact Arnold Vosloo
Lol once you see it, you can’t Unsee it
I'm upset I missed this. Spotting doppelgangers is a hobby of mine. Nice catch. Lol
Barely thirty minutes in and I know that I'm going to have to watch this several times
Make it 5, 5 minutes in
@@aguysaid5457right? Hahah it did not take me 30 minutes to realize imma need to listen to this one SEVERAL times.
Me too.
I made it almost 12min. Holy heck! I will watch again
Regarding Bolsjeviks and Mensheviks. I fervently believe that if it wasn't for the Bolsjevik revolution, i.e. if the Mensheviks more reformist vision had prevailed, a large part of the modern social democratic societies of Europe never would have come about, simply because capitalists were forced to make consessions for fear of a revolution, where they would lose their power and privilege altogether. This is also a major reason why since the collapse of the Soviet Union, we have seen capitalists reassert power in the west and welfare societies are being gradually dismantled.
I wrote an essay on socialism... it got full Marx.
🤣🤣
@Samuel Dixon you can like it now
wakka wakka 😁
and 99 thumbs up..
Teacher: get out!
I bought his book "Debunking Economics" back in the day (15 years ago??) and I was 1 of a small handful of people who voted for him to represent New South Wales in the Australian Senate (his party was a micro party that didn't have money or run a big campaign... hence he didn't have a chance). I'm always surprised why he hasn't become more well known, but his perspective is worth observing when trying to navigate the complex field of economics.
What books would you recommend to someone who is just starting to seriously study economics and wants to get a balanced exposure to important ideas in economics? Beginners are often exposed to mainstream ideas only, and, if it happens at all, it takes them a while to discover on their own the less known yet valuable ones. 🙂
@@BiancaAguglia Check out The Deficit Myth by Stephanie Kelton! There are vids of her available too.
@@graham6132 Ya, didn't he turn out to be wrong about practically EVERYTHING?
@@BiancaAguglia 'adults in the room' by yannis varoufakis is very eye opening
@@graham6132 yeah, you know the people you dont agree with are all crazy, very reasonable man
I'm pretty sure the first law of thermodynamics is you don't talk about thermodynamics.
He’s been studying this for decades but wasn’t able to give a single example, anywhere in the world, at anytime in history, where socialism was better than capitalism.
He didn't want to or care to. Also funny you missed how much he trashed on the current economic system and the neo classical.
What about cuba?
He's not a socialist, he's a neo-keynesian
I hope you realize how much goes into the success of socialist countries. It's not as simple when you're dealing with sanctions, regime change and democracy from a gun barrel.
Cuba increased literacy rates exponentially and there's healthcare in the most remote parts of the island. Previously people had to walk the injured for hours to get to hospitals.
China lifted millions upon millions of people out of poverty and subsistence farming and their latest projections are saying 1.2 billion people in China will be middle class. We're talking almost 12-15% of the worlds population here!!!
If that's not socialist success I don't know where the goalposts are anymore. Maybe idiots like you should stop moving them
Define better?
Wow. One of, if not my favorite conversations you've had. Please have him back.
@@ssssds5254 what a weird fucking comment, and you edited it lmao
Okay commie
@@ssssds5254 what a weird comment to get angry at
That thread about banks, assets, liabilities and money creation wasn't fully developed.
One of my biggest “issues” with economics has always been what Lex pointed out in his question, “do they not consider a worker a human being?” They really don’t when you read economics. Workers aren’t viewed as humans nor are the consequences of lay offs or other actions that affect workers are considered as particularly bad. The idea is that the workers will just learn a new trade (which is totally not how it works in real life).
For sure. If we had to regard humans as beings rather than as a resource we would be forced to make some pretty substantial changes.
The motivating force in capitalism is profit - not supporting the needs of human beings.
All those decisions you point out are related to the pursuit of profit.
Econmics is a science(soft not hard but still a science) their job is to tell if a and b what happen next...what is right and wrong is out of the science goal...also if think that economist don t know that the more old a person is the more hard is it to retrain him in to a new job u have a totaly distorted idea of the subject...the fact is what is the alternative? Let everybody continue do a job that s not profitable just becouse is hard to them find a new job?in somecases can be done but if this become the norm an economic sistem will collapse...also usualy the kind of job somebody will be retrain in to is a very similar one a factory work will search for an other factory job where the skill set is almost the same...
@@CarlyonProduction What do you mean? I don't know about you, but from my experience, businesses do not succeed if they fail to produce a desirable product by the majority (people). Especially if businesses are given more freedom to innovate and are not constrained too much. I have hundreds of examples of businesses that make me happy and support my needs - and much better than, for example state-run services. Many many examples.
@@CarlyonProduction yet the majority of happy people that I know work in the private sector, not for the government. And I know plenty in both sectors.
So glad that Steve Keen raised the problem of the effects of consumption on the environment and human induced planetary ecocide. Most other economists, including Richard Wolff never mention the environment.
They're economists not environmentalists
This is hilarious ! 😂 Well, Lex ... It's easy to listen about black holes, astrophysics, theoretical physics, gravitational ripples, A.I. but this is on another level.. damn great show !
Steve Keen is the Rickest of ricks! He is Rick C-137!!!
agree 100%
It's because the human brain is the most complex thing we know that exists in the universe...and we created economics...lol
I’ve posted this many times on various interviews with economists Lex has done, but he needs to have Yanis Varoufakis on his show.
Techno Feudalism.
Yanis is a hack
Absolutely
A Russian communist
Yes please.
You can tell Lex really liked his guest because he challenged him all the time. When he hosts a "dangerous" interviewee he's usually very careful when to chime in and go for a tough question. First example that comes to my mind was the exchange about "friction" with Douglas Murray.
Or his interview with Sam Altman. Lex didn't challenge him, even on obvious guffaws.
I had the pleasure of having Steve as an university lecturer many years ago - he was as brilliant then as he is now.
Me too! Steve made me love economics
Wow! That’s awesome. Definitely am inspiring mind.
Marxian economics, I didn't know that there was such thing. I guess it is what we have in Cuba, well, I don't even want to talk about the results.
It really sucks as a cuban that many persons insist around the world in the same ideas over and over after the disastrous effects they have had in the lives of millions of human beings. Then central planners (what we are surrounded by) insist and keep insisting, it always reminds me to Hayek and the information problem that central planners ignore, the knowledge is not in the core, it is in the cells that surround the core, it is in the market.
I’ve recently retired. Now my true education begins. Thank you and all the best to everyone. Enjoy every day. My fear is that money will continue losing the buying power planned for in my retirement, Seems that, except for the criminals that rig the game, making ends meet grows ever more challenging. This must end. Power must be stewards for humanity.
Cheers beat of luck for the new journey
Power will never, and has never, been stewards for anyone else but itself. Power and government must be exterminated. All history proves it.
If you go to the shop with money... and come back without the money but instead with a loaf of bread to eat... Then money does indeed have value. Stop paying all your bills. See if the value you've been getting in return is taken away from you.
"My fear is that money no longer has value". Precision is important with issues like this. What you possibly mean is "Money has decreasing value in an opaque system I don't understand."
Inadvertently use sweeping binaries? Be prepared to be fooled by them.
@@gwho Please watch “The Money Masters.” Then get back to me on my “sloppy and emotional thinking.”
great to see Steve Keen getting mainstream recognition.
Lost me at FTTH in Oz - the Lefty missed out that FTTH was literally drawn on the back of a beer coaster (Conroy) - Australia doesn't have China's population and ENGINEERS advised Turnbull that FTTH was ridiculous - also Turnbull was the founder of the successful Private company OzEmail, so he's no numpty. There's always Wireless and (Musk's) satellite alternatives.
Then he says that masks stop Rona - when retailers were being fined AUD$10k for saying that they'd prevent SARS/MERS. Shill.
And, of course, Economists love taxing the atmosphere (the dreaded "Carbon")... now they've moved on to Nitrogen in the Periodic Table of Elements (Netherlands et al) - what's next?
EU Feudalist enabler, no wonder he loves the Feudalist Sino society.
Does Lex have a fetish for Pinkos?
Third time lucky...I have been trying to watch this bloody podcast for ages...every time I settle down with a beer and my cat " no sarcastic remarks you bastards " something or someone gets in the way... it was worth the wait mind you, pretty sure the cat agrees with you to lad. Good man, thank you for your time 🤙
Thank you for these long videos. I can’t get enough of you.
You’re becoming excellent at the simplified breakdowns Lex. Keep going, it’s really great work.
it's actually him rewording and re-framing what was actually said by his guest.
not something that I feel will benefit him.
This discussion is at the nexus of all the different chains of thought I've been having over the past few years
Well said
Amen 🙏
took me a few days to complete this one, but I enjoyed every minute!
Perfect timing to hear this wonderful talk. I do so appreciate Lex and your wit and being ok with not knowing and asking a most fundamental and yet powerful question of: "What is money?" and then in a incisive manner offer this: “That is not French it is another language and I will explain it to you another day….” My wife who is French never understood why this idiom is used in English. Thank you
Appreciate lex getting a more diverse range of voices on the show. Steve is a very smart guy.
I have to say that lex's podcast is one of the most interesting pieces of information you can ingest.
Lex was planted, because I haven’t been recommended Anything on TH-cam for over 4 years, so you tell me! I watch 10-20 videos per day and nothing for years….
I've listened to Steve a bunch of times and just now realising I've outgrown his theories
Outgrown Marx poetry? Maybe it just got boring.
Outgrown to what exactly? To what we currently are doing? That seems to be doing so amazing right now lol.
Do you have a better theory?
Same. Common sense, consensus building brilliant analysis , followed by disastrous solution propositions.
How smart people can get on board with the idea of infinitely powerful centralized global power as protector of freedom, is bizarre.
I listen to a great many podcsts, but I have gotten so much more out of this one than any other. Great; now I have another person whose collective works I have to read. Thank you for making these talks available.
Wow, I really didn't expect to see Steve Keen on this podcast. Thanks Lex! What an awesome episode.
Would have been excellent if Steve spoke about what’s happening in Australia 🇦🇺 at the moment. The government has got out of control
@@tasd5673 you literally watched this and did not take in a single word did you?
@@bryce3907 sorry Bryce I wrote this comment before he started. As always🤦, however still would have been nice to cover more of the issues.
Have a great day
@@tasd5673 WTF ?? are you a bot or truly that stupid
Lex's best podcast as a very capable interviewer. Keen is intellectual but accessible and breaks down a complex area of his expertise. Lex did a good job. I think his most confident at pushing back, but objectively.
An interesting thing about economics is that economists can make one sweeping claim affer another, assured of how valid their claims are, and yet none of these claims need ever be proven or supported by a preponderance of good evidence.
Austrian economic theory combined with GK Chesterton political theory (Distributism) is the way things ought to be.
Please get Michael Hudson on. He is unparalleled when it comes to economics and has a fascinating history and background.
He already had Michael Saylor on. No need! JK.. More opinions the better.
yes!!! I'll pay for his airplane ticket hotel anything!!
Agree. A study of both Keen and Hudson has helped bring a great deal of clarity to my observations of the world. Calmness follows clarity for my fellow anxious types.
Facts
@@subucni113 saylor has said some of the dumbest shit in history.
I like how Steve Keen recognizes the fundamental ecological basis of economics. This is a key insight that grounds his way of thinking in reality to a degree that has not been achieved by any traditional school of economic theory.
One of your most enlightening and thought provoking interviews! For one who has studied and thought about economic theories and their impact on the human condition, this was a feast!
Don't worry Lex I remember assets and liabilities being explained to me during a compulsory accounting paper and I didn't understand a word. Told my lecturer at the end of class and he laughed at me and then asked if anyone else didn't understand and nearly everyone raised their hand. I'm sure there is a good way to explain it but this guy much like my lecturer hasn't found it.
All credits balance with all debits, all assets with all liabilities. There is no net-net. You may think you have more assets than liabilities, but only by forgetting replacement cost!
Agree, he confused me even more than before. That's because he's not actually explaining it, he's using his own understanding to describe it, which makes no sense for those who don't actually possess his knowledge. He's not a good teacher.
i go to sleep listening to Lex every day. best therapy ever. your a phenomenal human being man. keep it up
Finally! An economist who's actually an economist and not just some ideologue!
He really sounded like an ideologue to me.
@@mikhailnikolaev7813 And Keen himself has been debunked many times. He has a habit of "debunking" strawman arguments (I'm referencing his book "Debunking Economics".
Well he is fundamentally an ideologue and hypocrite. He blasts other people's oversimplified models (which i agree with) then promotes his own oversimplified models as the word of god which cant be questioned. He is a hack.
Also... let it be noted and history has proven this over and over... the only people who understand the economy LESS than a politician is an economist.
An economist is an intellectual elitist with no practical experience IN the economy.
Economics is a science and economists usually use crayons to make their proofs. This guy is using a pastel crayon and thinks he knows it all.
Lmao is as much of an economic ideologue as possible but ok
@@mikhailnikolaev7813 I don’t find Keen to be demanding social change in pure lock step with the left or the right. He might be ideological but he’s really just asking you to acknowledge the enormous consequences of bad theory. The appalling failure of communism is not something he would ignore while the others have clearly just ignored them.
I love your podcasts, Lex. You seemed more witty and at ease than ever on this one. Steven Keen is amazing, too. Thank you!
I like Lex. Probably my favorite Podcast to watch.
I’ve seen a bunch of talks by prof. Steve Keen and this is the first time I was able to follow his line of thought. Thanks
As an Australian I love hearing the accent in contrast to the American majority I listen to on youtube. We really flap our gums in the wind hoping for coherence
Do you mean Lex's accent?
@@MissTryALot if only I could distinguish australian from american...
@@arabusov There's a big difference...
@@arabusov Like Steve said using words like "Bastard" can be seen as a negative in USA but in Australia it's Seen as a positive word but of course it depends on the context and the tone of how the word is used.
There's words that Americans don't use that Australians use and vice versa such as Crikey or Oi.
This is the third time I watch this interview!
It’s very impressive how lex kept up with Steve Keen. This was a really tough discussion spanning so much theory and history in one. How does he do it?
Lex is a very smart man. He’s an AI computer engineer and programmer. Teaches at MIT. So he can easily keep up with a deeply intellectual conversation.
Keen deserves this exposure. Always amazed me he isn't more highly regarded.
He's good at math, bad at everything else
MMT lol
@@qwerty6574 Leaving policy aside, MMT is first and foremost a description of how fiat currency works in countries like the USA, along with the implications and consequences of those facts. There I said “facts” because that’s what they are.
That said, you can lol at the mainstream interpretation of MMT all day if you like.
@@stevo-dx5rr cope and seethe.
@@qwerty6574 That means nothing to me.
Einstein on said "if you can't explain it simply, you don't understand it well enough"
He started me reading again on economics with his last book. I ordered several of the books he recommends in this book (The new Economics). Very interesting books. I'm almost through with the MMT macro book and enjoying it very much.
Great interview. Thanks.
The deficit myth by Stephanie Kelton is very good.
@@StarvingAutist Yes it is. I read Stephanie's book before Keen's. Stephanie Kelton's book is an easier read. However, if you want to dig you have to get some textbooks.
@@jsimonlarochelle Read Lyn ALden's book for the best synopsis on money - I have been looking for a book like that for ten years
@@wellyman2008 Thanks ! I will get a copy.
I think the humor especially at the end is quite refreshing in the middle of deep conversation
Lex’s episode output is immense, it’s always worth listening to and looking forward to this one. To his credit he always looks from both sides and embraces the differing viewpoints
He did a lot of filming/interviews before he left for ukraine to fill the gap
Unless Lex is an expert in everything, he puts in a lot of research before each interview.
@@scabthecat Exactly ! An incredible amount of content to prepare for … yet makes it look easy !
And that's what makes this podcast so special
I think he understands Marxism better than any communist has yet. Use value and exchange value . Labor is only one element of economics utopian/dystopian ideas resulted in socialism-communism. Authortarian governments rely on top down control stifling individual liberties and innovations which constrains progress.
Lex's humor was on point and has been lately. Also his pushbacks are superb
Must be on that alpah brain from jre product line
No. His quips here are lame. Cringe.
@@lawrencefrost9063 You're lame
I love this guy. These are the topics I love reading about and am familiar with so many of his points and most philosophy language. I've had more than one lex brain break while reading hegel lol
Steve Keen is F’ing brilliant. Great interview!
Holy smokes… I’ve never seen Lex reaching his thinking capacity. Tricky subject, economics.
It is when steve is seemingly trying to confuse him.
He has plenty of times. Endearingly honest and humble dood
@@nenadmatic7166 Perhaps this is due to it's inherently social and constructed nature when compared to "hard" sciences rather than being difficult because it is technically demanding, though you can certainly go deep into the technical side as well.
@@tom4115 lol, how? He spoke fairly plainly, and didn't even use too much economic jargon. Yes he used "big" words, but God dammit have you ever considered that BIG WORDS ARE FUN? Can you not understand how boring and even painful it could be to speak plainly for 4 hours, what's even the point of having a conversation with someone if you don't find having the conversation to be engaging in the first place. These men both have PHDs for christ sake, let them live a little, sheesh.
P.S. if you really can't understand the appeal of big words, I recommend you watch the animated sitcom "Archer", or anything made by Quentin Tarantino. The power of clever dialogue is seductive.
@@cjlooklin1914 Fair enough, I really dislike his character though, so I like to criticize him.
For those interested in the double entry bookkeeping system: it was conceived by Pacioli.
I thought it was the Medicis?
Bitcoin fixes this
Any other accountants out there?
@@bobthetroll 😴accountants rn
It is the balance or the synthesis of the two systems.
Thank you for trying to bring more love and understanding into the world. I'm grateful that you allow for civil discourse between opposing ideas. This is what journalism used to accomplish.
The neoclassical school's emphasis of equilibrium came during a time in which the theories of Plato and "perfect forms" were in vogue in many areas of academic study, including physics and chemistry. This school displaced schools such as Institutional Economics, which maintains that economics must be understood within the context of political and social institutions. The latter can't be reduced to equations, and thus lost favor to the neoclassical school. Yet, 2008 has thrown the mathematical and neoclassical schools onto the ash bins of history.
This was great. I've listened to Keen a bit talking his economic viewpoints but this was far ranging and he expounded on a lot of things that surprised me. It's a little intimidating listening to someone so thoughtful and well read. While I have thought his economic ideas interesting, it really fleshes them out in other ways knowing all his considerations. I haven't even gotten through the entire interview without having to re-listen to some of his explanations.
A fine job Lex!
I’ve also gone back to replay several parts of this remarkable interview.
@@juancarlosmartinez3621 kc
Yeah
Yeah I’ll
Oiiiiiii
P
This guy is so incredibly likable. Some of this was really hard for my head to make sense of but a great conversation.
It's because he actually didn't make sense. Odds are, you are not stupid...but trying to understand a socialist, green party economist who failed at teaching and can't even define his own terms in a logical way that Lex can understand means that you are not the problem. Keen is.
@@WtfTH-cam_YouSuck I disagree. I find Keen to be brilliant and has a more realistic understanding of the world than most intellectuals.
@@WtfTH-cam_YouSuck obvious troll
@@xyzyzx1253 He’s not trolling. Keen’s ideas are pretty widely disputed and the general critique of him is that he’s too ideologically driven; ironically that same critique that he makes of the “mainstream economic theories”.
Listening to and enjoying Keen as a person and economist is all well and good, but it’s always worth checking what other scholars in his field think of his work.
@@TheBreezeShoot which ideas are those?
Based on what I learnt in a module on IPCC science in my masters in Environment and Economics, I have two answers to Lex's question asking how we can be at all confident about our predictions of the future patterns of the complex system of the climate:
1. The General Climate Models (GCM) that the IPCC uses are verified by simulating climate change in the past and comparing it to real data - i.e., we use a GCM to 'predict' temperature change in the 20th century as a result of emitted greenhouse gas emissions and compare it to actually measured temperatures, if they are identical or very similar then we can be confident the models are accurate. Such validation has been carried out, and the GCMs do indeed predict temperatures very similar to observed temperatures.
2. Using the palaeo-environmental record - ice cores, tree rings, marine sediments, etc. - we can estimate carbon dioxide concentrations, temperature, sea-levels and many other variables for past climate periods. Using such 'climate reference periods' we can guess what kind of changes we are likely to see as temperature and CO2 concentrations increase and make predictions about how the climate will change in the future, based on real data of what the climate has been at earlier points in Earth's history. Essentially, we can look at how the climate changed in the past and use that to guess how it might change in the future if add energy to the system via the greenhouse effect.
If we consider the Gulf Stream (or Atlantic Meridional Overturning Circulation [AMOC]), we can see from ice cores that this current has stopped multiple times in the past and may stop again in the future as a result of climate change, which is a cause for concern because of the changes to ecosystems and human societies this would cause - e.g., as Steve points out, as this would significantly reduce the area of land globally that could grow wheat, which is a staple crop in the global food system.
Sources:
-The Summary for Policymakers and FAQs from the WGI (physical science basis) chapter of the most recent IPCC report - www.ipcc.ch/report/ar6/wg1/
-Source discussing how the AMOC has shut down multiple times in the last 60,000 years -www.nature.com/articles/nature01090
Joe Rogan podcast has nothing on Lex Fridman podcast. This is a Master Class.
I would see Steve a lot over the years on like a Kaiser Report or other smaller financial channels. This was really nice to hear him longer than a 20 min interview. It seems like this is how an intro to higher level Econ classes should be.
I think it would be cool to see a debate and discussion mediated by Lex between some of the economists you’ve had on with differing points of view.
Terribly difficult unless you get folks who at least agree about the basics of how our monetary system works.
At least in my experience about such debates between those who do & those who don’t understand the basics
@@katiecannon8186 Yeah maybe Lex should just stop having economists who thing counterfeiting money is somehow some kind of virtuous necessity on.
@@xraceboyexspeaking of people who don't understand the basics....
I like how Lex takes these intellectual conversations and follows it with questions the common man in this situation would ask to attain enlightenment of a certain topic. Good stuff
@33:00 Keen misses the reason why you accept $ off the guy you're selling your beer to. It is *_not_* because the bank promises to pay you... pay you what?! They'd only pay you a piddling amount of interest if you deposited in a term account, not a cash account. The real reason you accept the $ tokens is because they extinguish your (or someone else's) tax liabilities, in other words, the government issuer promises to accept them back for payments of taxes, fees, fines and levies. There is no other reason to accept the state currency tokens, fundamentally. So the bank is merely acting as a (privately owned) agent for the state, running a payments clearing system. It is the government, and only the government, that promises to redeem. If they violate that promise they've defaulted, and if they do that to much the value of the currency will depreciate (relative to other governments who back their promise to redeem).
Point of MMT is that all sovereign governments tend to keep their promise (unless their tax department gets destroyed), and *_can always keep the promise_* operationally, because they are just accounting entries in spreadsheets. In the old days they were ink entries in ledger books.
It is not "printing money" either. All currency issued by governments has to be approved by votes in Parliaments (unless there is corruption) and those votes are invariably made to hire people to work, or contract suppliers (often the military, make of that what you will, but the parliamentary votes are what do it) or provide welfare for retirees and other beneficiaries who cannot or should not be working.
So the government (absent corruption) is in a reciprocal arrangement with society, they are always (absent cronyism) getting something for issuing their currency, either public labour, private contract supply or a decent society for retirees and children. (Social welfare fraud is a thing, but it has never caused inflation in all of recoded history, and never made anyone rich, not like crony subsidies to the likes of Elon Musk.)
Cronyism and corruption exist, but clearly not sufficient to drive any hyperinflation. In Venezuela the corruption (issuance of bolivar to cronies for nothing in return which then gets swapped in Miami for USD) _is_ driving inflation, but not so in most other civilized nations.
You cannot really prevent hyperinflation with currency supply constraints, because banks issue most currency through loans - where your liability is the promissory note to repay - and so under such banking arrangements the government has no control of the money supply. The inflation is caused by price mark-ups and/or supply bottlenecks, which has little to do with the quantity of money in existence, and everything to do with oligopoly power. What drives price pressure is the circulation of currency, the flow, not the stock. A mega-trillionaire old spinster who only buys cat food for her cats is not causing any inflation. An oligarch who monopolizes cat food who can mark-up the price at will, supported by banks willing to issue loans too liberally, are the ones causing inflation pressure (for only the commodity they monopolize).
About 97% of currency in circulation is bank credit, only 3% is government deficit issue. This suffices to tell you where inflation pressures come form, it's on the regulation of bank credit and monopoly deregulation side, and supply side, not the government fiscal side.
The worker is not the commodity, the labor of that worker is the commodity.
Fascinating and thought provoking episode, nice work.
Hello,
Thank you for this interview -
Few questions for Steve
What measures/indexes are used to determine if an economic or social system approach is broken or approaching a breaking point?
What are some good outcomes to solve for besides profit in an economic model?
What are your thoughts on reciprocity models? Are they ethical? Are they useful?
Not Steve but knowing him the second one would probably be environment. i'd answer standard of living and environment.
@Cam Corl yeah agreed, I think what Paul Krugman aims for is quite reasonable. Good potential for enterprise, not unreasonable inequality, and a safety net to prevent people from falling too far if something goes wrong
Thank you Steve Keen, Even I without a science background could follow the general concepts. Thank you for all the thankless work you have done and are doing.
Yes, Professor Keen is quite brilliant. But he will confuse students of Hegel when he says "thesis -- antithesis --- synthesis" is complete "bullshit". Yes, this was interpreted from Kant's idea and formalized by Fichte. But it has definite similarities to Hegel. Underpining most of Hegel's writings was the dialectic of "abstract --- negative -- concrete", wherein an incomplete idea must move from abstract phase through a negative phase, reaching a concrete meaning. Hegel did not agree that "synthesis" came out of two paradigms colliding like billiard balls. Rather, it was one ball, passing through a phase of questioning and editing, reaching a state of concrete meaning. But obviously, Marx missed this slight difference too.
@@Borat_KazakhMarx didn't miss this, and what you're describing is not at all the same thing as thesis-antithesis-synthesis
@@Borat_Kazakhthanks, that’s insightful, I should just read the guy one day
To each according to his abilities= You work as hard as you can.
To each according to his needs= But receive only the bare minimum in return.
That would be the case if humans were unable to create surplus
This dudes not even a marxist
Even though I strongly disagree with some of his political views regarding freedom and the pros and cons of a top down, authoritarian government, I loved the discussion and his teachings on different economic schools of thought. Hands down the best discussion I've heard on learning the basics of Marx's theories. You did a great job of getting definitions of basic terms that are often given different meanings by different schools of thought. Made for a deep and much clearer discussion. Well done!
I thought it was terrible on basics of Marx. No class, no historical materialism, no epochs, no alienation, no superstructure, no forces of production, no relations of production, no proles.....I'm not sure how anyone would get a sense of Marxism out of it tbh. I speak as a fan of Steve Keen, just think the Marxism section was really unclear and even incoherent. Difficult to see how what Steve said would lead to production of 'The Communist Manifesto' IMO.
Anybody who treats Marx seriously is a moron
Not much of a discussion. More of a longwinded one-sided free advertisement for authoritarian leftism without any pushback from lex. Again. As usual.
Do you think Lex would give such free airtime to a nonestablishment hard right winger, let alone give them no pushback or argumentative debate?
@@bradojacko8247 cope
@@haalogen1917 Cope? This guy was literally arguing that inflation is a good thing (counterfeiting money is okay because the government will totally decide to only do it for "good reasons" without any oversight." This guy is a clown
Dollars backed by aircraft carriers.
Best podcast on TH-cam. I have to say, I was getting a bit put off by the lack of differing political opinions on the show a while back (one libertarian after another), but recently Lex has been smashing it. Keep it up and thank you for having the courage and patience for listening to so many viewpoints
Thanks for speaking with Keen. If you’re interested in alternative economics you should also interview Michael Hudson sometime!
100%
Was thinking the exact same thing. Hudson has a fascinating mind and perspective. Killing the Host and Forgive them their Debts are amazing books on economics.
14 minutes in and this Steve Keen gentleman seems extremely intelligent
One of the few people who understood the 2008-2009 crisis.
As an econ student, It is fun to see how economics blowed Lex's mind, for how smart he is, I felt better after failed my exam.
As an econ student you'd probably realise how bad and overcomplicated his explanations are too I don't blame lex. Like for Marx they went on for 10 minutes over exchange and use values not understanding anything where it's as simple as: exchange value is what you buy a commodity for, use value is what it's value is to you and labour is the source of all value as it's the only commodity where use value exceeds exchange value
Nope labour is not the source of value.
Guest recommendation: Slavoj Zizek :) I would pay to see that interview.
This was one of the best guests you’ve had. I think more people should see this and listen to understand. Very dope podcast and if some can listen and open their hearts a bit, this can be quite introspective and learning for a lot.
I have a few questions about value. What happens to the amount of value available in a system if we consume more value than we create? Next question in a Marxist utopia how does an individual invest his value rather than just consuming it? What specifically can an individual invest the fruits of his labor on?
@@stuckinthemud4352 that in itself is perpetually up to many variables. I think that depends on someone’s perspective on what “fruit” is to them as not everyone’s “fruit” is something of the material form. It’s much to broad. Also, I don’t think anyone is proposing that under any theory that there would be existent utopia. Ultimately, the whole idea is to work and live rather work to live and escape the fuck of a rat race everyone seems to be in as well as a mass catatonic state of schizophrenia lol
I am a Bitcoiner and I hereby make this analysis.
25 minutes in and I saw a few flaws in Steve's ideas:
1) Whoever Schopenhauer was, his excitement over money creation is problematic.
Yes, money is created to finance the entrepreneur(who has no money), but there is one creator of money and many entrepreneurs. So the money creator is in power and they can direct entrepreneurship towards something worth-less e.g. if their friend is the one who needs money and not the proper entrepreneur stranger next to them.
So, money is best not created to be given to entrepreneurs but entrepreneurs should contest for the funding fairly in a free market setting with the government as arbiter but not financier.
Why
Let's go to point 2.
2) Celebrating modern monetary theory's idea of money as "an accounting tool" and not as an object that we have to earn by merit is how you get broken money in the first place.
Anybody can balance some accounts. So should anybody make money ??
The thing really is to understand why credit exists in the first place. Credit is predicated on pushing towards a hypothetical successful future in order to see it come to pass as a reality.
But the best way to do this is not to use the illusion of borrowing from the future which is what Banks think they are doing by creating money. Thinking it comes from the hypothetical successful future.
Unless we are in a world where we can time travel, borrowing from the future is not possible.
Remember, it is not yet a certainty that success will happen. So the reality is, we have to sacrifice more things today to see that that future happens. We have to pay huge opportunity costs.
If money is seen as an object then it will be clear that in actuality, credit is taking money from other parts of the economy where it was circulating value and pumping it into the dream of the entrepreneur in anticipation of a successful venture in the future that will return greater value to compensate for the sacrifices made.
Great guest you got there Lex. Very smart.
Didn't know economists use difference equations more than differential equations.
Do check out econo-physics as well.
Though overall, Bitcoin is the rage.
And I know Steve will get there too. It is irresistible.
Perhaps I'll skip to his Marxist insights but with money printing, I'd say that is the wrong tree.
He makes more sense to me than any economist I've listened too. Love his explanations of different economic models but hard to retain. Have to listen to this a few times Lex to wrap my mind around it.
by the mere definition of something making sense, you wouldn't need to listen to it multiple times to understand it. he just succeeded in confusing you in a way that made you think you understood. for example when talks about economics needing to use differential equations he makes it sound like it doesn't, but economics does use differential equations. differential equations is typically used to model motion and economics, its called growth. in fact, differential equations is extensively in derivatives pricing and volatility modeling. this guy either is lying or doesn't know what he's talking about.
@@TheNemesis442 Man are you for real? Derivatives pricing is finance, not economics. Finance uses all sorts of advanced mathematics and algorithms because they have a profit motive, if they do a bad job they lose money. When we're talking about economics, the problem is that someone can win the nobel prize with a theory that is mathematically elegant and simple, but has no practical value or application in the real world. When criticizing neoclassical mainstream economics, the criticism is of the general class of DSGE models which DO NOT use differential equations and simply assume natural stability in the system. Keen's point is that if you have an economic model that by the nature of it's construction can't model how complex feedback loops can lead to an economic crash, your model is obviously trash, because we've seen this happen over and over again, we know it happens.
Mainstream economics takes it on faith that the economy is naturally self-equilibrating, and that anything that throws the economy out of equilibrium is an "exogenous shock", rather than making any attempt to actually model the problem. So for instance in 2008, we end up blaming "perverse incentives" and illegal activity in the banking sector for messing up what would otherwise have been a perfectly perfect economy, rather than actually looking at the unsustainable build up in private debt and the role of that credit creation in sustaining overall aggregate demand...
He's not talking about derivatives pricing models used in finance which have an extremely narrow purpose and scope of their modeling. He's talking about models of the overall macro economy that can be usefully used to inform policy choices.
@@Ballosopheraptor well, yes. derivatives pricing models are used to try to find an objective measure of value, which is what you do in economics. economics is how you deal scarcity and scarcity is heavily influenced by objective value. i dont see much of a difference here. the semantics may be a little different, but not the principal.
The Lex Fridman show......Is THE best thing that ever hit the internet.
Thank you so much for coming on the show and now I will be able to follow your social media- I don’t have $ yet - but I am very interested in helping any other way
Incredible interview, thank you both!
Thanks Lex for interviewing Steve . Simply Brilliant?🙏🏻
Lex - I appreciate you calling Steve out on his anecdotal statements surrounding climate change. You are the BOSS !!! Love you brother, be safe!
Such a good talk.
I do watch your vid posts repeatedly. This one reminded me that "capital" (money) is a fluid dynamic formula (as stated in this conversation) has to do with volume, flow, and environment effects.
The thing about the central planning types is that they fundamentally don’t understand human nature. Are we a collective or are we individuals? It’s a false dichotomy. How much top down order needs to be imposed versus what would arise unimposed by the fact that as humans we’re part of complex system?
They do not use reason. It is a type of pseudo-religious thinking
Naked libertarianism/pure game theoretic stuff playing out probably isn’t ideal either, particularly as the west goes through the growing pains of Nietzsche’s famous/prophetic proclamation that God is dead, but I can at least respect the Austrians for pointing out that the emperor (our institutions) has no clothes and that the “experts” are actually highly specialized idiots.
Great question.
This "thing" you describe as a problem was formulated and solved and moved on from about a dozen economic schools of thought back a long time ago. It's just an issue to you because you aren't close to the level of thought and understanding of where we are today.
Please tell me which schools of economics have solved for the free rider problem.
Steve Keen is such an incredible thinker and teacher. The world will soon realise that Keynesian thinking has stolen from our future and when this happens Steve will be given the credit he deserves.
Thanks once again Lex.
Crimes against Humanity,in my book.
We will own NOTHING and be happy is the result of Keynesian economics by 2030.
Keen *is* a Keynesian. He’s part of the Post Keynesian tradition - which is more true to Keynes than mainstream “Keynesians” like Paul Krugman - or whoever.
This is really fascinating. One of my favorite Lex podcasts.
30min in my nose is bleeding and I just opened a portal to the upside down with my mind.
AMAZING conversation, kudos Lex and Steve 👏
I really enjoyed this conversation. It was fascinating to finally hear a mathematically literate economist (and someone who understands some of the physics behind climate change).
Yeah the physics of anecdotal statements about climate change, Lex called him out on this.
Yeah like ‘some climate forecasts in the past have been wrong so let’s ignore the current scientific consensus’ Genius argument!
"We would still rather have done what you have done." That landed nicely. I don't always feel like a success, but I have lived and continue to live an amazing fucking life, by my own standards.
I am with you Lex. You are asking the correct question. Thank you Lex great podcast👍🏽
I'm so pleased to know my evening is booked with Lex. One of my most Favourite Guests.
He speaks frankly.
I recently discovered this channel and I am amazed at how good this guy Lex Fridman is at interviewing in-depth and conducting a great conversation with interesting guests. I knew Steve Keen (who is great!), but Lex Fridman is somebody the BBC could only dream of having for a special programme anchor (like they perhaps did 40 years ago). To have a 3 hour in-depth talk on Marxist economics, surplus value..., history of economic doctrine.... WOW! It take a lot of skill to both keep the high level and bring the guest to explain on a basic level, put focus on the guest while also knowing how to probe further into the subject discussed.... and Lex Fridman is masteful at it! And what a great guest to bring on! Great that I discovered this channel which I will now follow.