[...]... historians These new chapters ‘break the mold’ for the rest of the book, in that they are not critiques of the neoclassical theory of financial instability and economic crises – because there simply is no such theory Instead they set out, in an introductory way, the non-neoclassical xii   |  preface theories of debt deflation and endogenous money that I have played a role in developing (Keen 2008,... simple but glaring flaw in the application of conventional theory The economic theory of markets argues that combinations of any sort, whether by workers into unions or manufacturers into monopolies, reduce social welfare The theory therefore leads to the conclusion that the world would be better off without monopolies and unions If we were rid of both, then the economic theory of income distribution... were they ill intentioned – most of them sincerely believed that, if only people followed the principles of economic theory, the world would be a better place For a group of people who espoused a philosophy of indi­ vidualistic hedonism, they were remarkably altruistic in their commitment to what they saw as the common good Yet the policies they promoted often seem to non-economists to damage the fabric... resemblance to either Keynes or the Classical School of economic thought But their battle – publicized in the press as a battle between ‘Keynesians’ and the rest – has confused many members of the public into believing that the dominant school of thought in economics at the time of the crisis was ‘Keynesian economics.’ Nothing could be farther from the truth – if Krugman, Woodford and other self-described... exclude the dissidents from the journals they edited Up until the early 1970s, non-neoclassical authors were regularly published in the prestigious journals of the profession – for example, a major debate over the theories of production and distribution between neoclassical and non-neoclassical economists, known as the ‘Cambridge Controversies,’ largely occurred in the American Economic Review (AER), the. .. matters economic because you have in the past deferred to the authority of the economist There is no reason to remain quiet I commented at the beginning of this book that economics was too important to leave to the economists I end on the same note (ibid.: 312–13) Postscript 2011 As these excerpts emphasize, the never-ending crisis in which the USA and much of the OECD is now ensnared was no ‘Black... attention to the level of debt-financed speculation taking place, and considered what would happen to the economy when the debt-driven party came to an end The fact that the vast majority of economists pay no attention at all to these issues is why they were taken by surprise It may astonish non-economists to learn that conventionally trained economists ignore the role of credit and private debt in the economy... leading economists christened The Great Moderation.’ It seemed that, after the turmoil of the period from the late 1960s till the recession of the early 1990s, economists had finally worked out how to deliver economic nirvana To do so, they rejected many of the concepts that had been introduced into economics by the ‘Keynesian Revolution’ in the 1930s The resulting theory of economics was called Neoclassical... without mathematics, but which in fact I found quite easy to explain in the addendum to ‘Size does matter.’ However, for a detailed treatment mathematics is still necessary, so for those who can cope with the odd – or rather frequent! – equation, the most accessible papers are in the journals (Keen 2003, 2004; Keen and Standish 2006, 2010) and book chapters (Keen 2005, 2009a) The paper in the free online... were edited out of this edition, because the crisis has occurred – after the Subprime Bubble, which was in the background during the DotCom Bubble, finally burst as well.1 But these pre-crisis statements remain important, because they indicate that, without the blinkers that neoclassical economic theory puts over the eyes of economists, the crisis now known as the Great Recession was not an unpredictable . REVISED AND EXPANDED EDITION THE NAKED EMPEROR DETHRONED? Steve Keen Zed Books  |   Debunking Economics – Revised and Expanded Edition: The Naked Emperor Dethroned? was first published. on why the theory of demand is false in The calculus of hedon- ism’ and The price of everything and the value of nothing,’ and a record of the recanting of the Ecient Markets Hypothesis by. historians. These new chapters ‘break the mold’ for the rest of the book, in that they are not critiques of the neoclassical theory of financial instability and economic crises – because there simply