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http://www.bbc.co.uk/iplayer/episode/b01j5h51/Analysis_Steve_Keen_Why_Economics_Is_Bunk/
The above is the link to the BBC IPlayer recording of yesterday’s discussion at
the London School of Economics with Steve Keen. I think everyone will be
delighted with his performance as he put our views across very effectively.
I was not clear about the exact mechanics of his positive proposals. There
seems to be a recognisable similarity with Major Douglas’s proposal which,
although based on a mistaken analysis, would have, I think, succeeded in
ameliorating the deflation of the 1930s, but there is now another factor which
did not matter much then, the colossal gross savings rate. This needs to be
taken into account in one’s model of the economy. Low interest rates exaggerate
the actuarial value of pension fund liabilities, and pension funds seek more
injections of savings into the pension schemes to compensate. As I have already
reported recently Barclays put an additional amount into their schemes which
raised the total by over ten per cent. The other 90 per cent had taken 60 years
to accumulate.
Steve revealed very forcefully the woeful state of Britain’s debt burden, using
figures which compliment those I used in my recent review in ‘British and
Overseas’ of Tim Congdon’s new book.
Steve dates his concern to 2005. I suspect the rest of us cannot remember when
we first challenged orthodoxy, it was so long ago. However though he may rate
to us as a beginner, he is a very, very welcome one. His success shows he may
have that something extra, a skill in putting the points across clearly and
concisely. May be it helps to be Australian.
Geoff
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