Dedicated to the reform of economics

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We want to change economics, and the world with it.  We have seen Your (Nick's) outspoken interest in inequality and your view of an economic ecology consisting of consumer demand as well as business side supply.  It has struck a chord with us and we think you might be very interested in our academic and reform work which backs up your views.

Simply put we think current economics is broken and as long as it remains broken we will see cycles of unemployment, inequality and occasionally pitchforks.  

The current dominant economic paradigm - Neoclassical Economics -  which informs all government policy on economic matters is so wrong it makes critics seem crazy when they enumerate its flaws.  Of course academia is full of differences of opinion, but given the economic performance of national governments in the last 20 years can there be any doubt that something is wrong with the way we do economics?

The economy is a dynamic system. The software package Minsky puts modeling it dynamically on the desktop.

The economy is a dynamic system. The software package Minsky puts modeling it dynamically on the desktop.

IDEA economics is a fledgling organization  based in Seattle set up to develop and promote a very distinctive alternative view of economics based on the kind of mathematics that deals with complexity in chaotic physical systems – non linear dynamics.   The lead economist at IDEA is Steve Keen who used his dynamic model to predict and explain the 2007/8 financial crisis. At the time Steve made his predictions he was an economics professor in Sydney  Australia.  Since then he has become head of Economics, History and Politics at Kingston University in London UK.

We at IDEA have seen your warnings about inequality and they strike a very deep chord with us.  Our models explain the inequality which we see and offer a way it can be redressed.

Debt matters. The change in debt describes a critical line in the change in demand and employment.

Debt matters. The change in debt describes a critical line in the change in demand and employment.

Naturally elements of the model are complex and mathematical, but they are not arcane and all it takes to understand them is patience.  Steve has published many academic papers but he has also recorded non-mathematical presentations that   are reasonably accessible to someone who has an interest in economics.

Steve's work breaks down into two parts.  A critique of existing Neoclassical Economics and the development of his own non linear dynamic approach. The criticism part of his work is contained in his book Debunking Economics and in many blog posts and videos. The development of his own non linear dynamic approach is contained in a number of papers building on the work of Keynes and Minsky.  He has also developed his own economic modelling software (called Minsky) which has generic dynamic modelling capabilities but also features which lend themselves to his specific economic modeling approach.

We need backers like you to help Steve in his work and help us to promote his ideas.

My interest in Steve Keen's work was sparked when I heard him interviewed on a BBC Radio 4 program hosted a the London School of Economics.  Since then I have learned the kind of maths need to understand Steve's work and become involved in the task of promoting it.  I urge you now to listen to a recording of that same broadcast.  It does not deal with the maths but does give a good overview of his criticisms of Neoclassical economics and the features of the economy which  he believes are key to understanding its behaviour. Here is a recording of the interview on YouTube (https://www.youtube.com/watch?v=kZOiC9LxZYI)

I urge you to listen it and come to your own conclusions.  If you are interested find out more please get in touch.

Ted Carron

tedcarron@ideaeconomics.org