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A New Paradigm: Economics that considers 21st century crises.

Preamble:
--“E���DzԴdz���������: no discipline is more crucial to directly understanding “capitalism��, so no discipline is more propagandized. Thus, the need for “political economy��.
--“P���DZ貹�����Ի岹��: surface-level, linear logic is simple; children learn to make such arguments (now flaunted by internet “logic�� bros). The trick is in the underlying assumptions (ex. assuming away crucial aspects of the real-world as “e��ٱ���Բ������پ������; what happens when our language lacks the words to describe reality?), as well as contradictions (nonlinear) of the complex real world.

--With this in mind, I present a ranking of economists:
-1st Tier: Critical Political Economists who avoid constant, major externalities when they reapply their abstract theories to the complex real world: it’s best to start with Global South scholars who do not omit the majority of the world: Utsa and Prabhat Patnaik. This becomes difficult with Global North scholars since their scholarship is buried in one vantage point. Perhaps Yanis Varoufakis has some advantage coming from Greece. I’d like to see more on geopolitics/imperialism from author Steve Keen and environment from Michael Hudson
-2nd Tier: Heterodox Economists with major externalities: Ha-Joon Chang, Mariana Mazzucato
-3rd Tier: sandcastle sculptures oblivious of real-world capitalism’s tidal waves but still think they are looking out for the little people (i.e. mainstream Neoclassical reformers): , Joseph E. Stiglitz,
-4th Tier: sandcastle sculptures who could care less (i.e. mainstream Neoclassical zealots): Milton Friedman,

--Next, the target audience: the difficulty for critical Global South economists is they first must contend with the mountain of Global North scholarship to be taken seriously; this Everest is an accumulation of skewed assumptions piled on each other, from Classical (imperialist trade theory) to Marx (not living long enough to critique/integrate trade theory) to Neoclassical (rejection of reality) to John Maynard Keynes (representing the British empire). So, while there are accessible historical accounts (The Divide: A Brief Guide to Global Inequality and its Solutions), it’s been difficult finding accessible theory (I've attempted to unpack Capital and Imperialism: Theory, History, and the Present).
--Similarly, integrating the environment back into “economics�� is a massive project for the 21st century. This book is not accessible (dense! How did all this fit into 140 pages?!) for the general public; Keen flips on his professor-mode and dives into details to engage with economics students + science/engineering communities. So much labour still needed to translate all this so that it is accessible and participatory!
--For a general audience, start with Varoufakis:
i) Intro to real-world capitalism: Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails.
ii) Alternatives: Another Now: Dispatches from an Alternative Present

The Good:
Keen’s New Paradigm:
--“Debunking�� can only get you so far, as you must pair critiques with alternatives to be constructive. Thus, Keen has solidified his new paradigm with the following fundamentals:

1) Money/Accounting:
--Neoclassical fails: I’ve summarized how money/banks/private debt are conveniently obscured in the age of Finance Capitalism (as well as Keen's alternatives, i.e. Modern Debt Jubilee recovery + preventing financial speculation): Can We Avoid Another Financial Crisis?
--If you want to learn a technical skill to decipher how real-world economics actually operates, you start with accounting, not supply/demand equilibrium theology. Keen uses double-entry bookkeeping + Modern Monetary Theory (MMT) to debunk myths regarding government “borrowing�� and “public debt burden��: public deficit (spending) = private surplus, i.e. money creation. (Keen developed the software “Minsky�� to help model this).
…This is a crucial alternative to the credit-money from private banks (for-profit via interest payments, thus private debt), which dominates the age of Finance Capitalism (the catchy figure tossed around is 97% of money, see the documentary ��97% Owned��); if you obscure credit-money and private debt, you are hopeless with Financial crises! (ex. co-opting The Black Swan: The Impact of the Highly Improbable to treat Financial crises as random and exogenous instead of structural).
--The accounting of the Central Bank and Treasury is fascinating, but I’m still working on an accessible presentation. The folks are helpful, as is , but Michael Hudson is the revelation (The Bubble and Beyond).
--But wasn’t there a “Keynesian Revolution�� in mainstream economics? Keen contrasts the vulgarization of Keynes (“N���-�����Ա���������� from John R. Hicks to Stiglitz) who butcher the radical direction of Keynes (esp. uncertainty + volatility of future expectations) which “P�Dz���-�����Ա�������Բ��� have adopted.

2) Complex Systems Modeling:
--Neoclassical fails: further butchering of Keynes is “m�������ǴڴdzܲԻ岹�پ��DzԲ���, failing complex systems by crudely aggregating from the micro parts to the macro system. Complex systems cannot be reconstructed by simply adding up its parts due to interactions between the parts at various levels leading to “emergence��, nonlinearity, feedback loops, etc.
-Ex. aggregating individual demand curves (already problematic with “Representative Agent�� assumption that conveniently omits class distinctions) to form the market demand curve. Plenty more debauchery with Marginal Productivity/Utility theology obscuring the distribution of income/wealth/power��
--Keen refers to the engineering/science communities' application of complex, dynamics systems theory to reveal how medieval mainstream economics modeling remains: Thinking in Systems: A Primer, and presents the alternative of Post-Keynesian “macrofoundations�� for macroeconomics. I currently find this approach to macroeconomics more applicable than say Classical/Marxist attempts to integrate micro with macro (although I have bigger concerns with Shaikh’s conceptualization of capitalism and imperialism, i.e. focus on “advanced�� capitalism as a closed system). Note: Keen’s criticisms of Marxist economics�� “fundamental issues�� are absent, see .

3) Biophysical Economics:
--Neoclassical fails: ugh, where to start? Keen goes back to Classical economics, where Adam Smith went astray from the prior Physiocrats' direction (where land = source of wealth) to focus on labour + production (thus, the “labour theory of value��). This is a neat contrast to Hudson, who is especially bad-ass regarding the geopolitics of Finance Capitalism, but still centers too much on Classical labour theory of value (romanticizing “Industrial Capitalism��: Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy) which simply treats the environment as a “free gift��.
--To actually include the environment (esp. energy) as an input (thus, not just capital + labour inputs) and waste as an output (not just an “externality��) really challenges how we conceptualize economic “surplus��, “growth��, “efficiency��, etc. Keen has only introduced the technical baseline here, but pairing this alongside accounting/complex systems is the key innovation of this manifesto.
--Next steps include synthesizing the technicalities of, say, Energy and the Wealth of Nations: Understanding the Biophysical Economy, with more radical social analyses from Less is More: How Degrowth Will Save the World and Governing the Commons: The Evolution of Institutions for Collective Action. Ecosocialism is of course preparing such synthesizes: Facing the Anthropocene: Fossil Capitalism and the Crisis of the Earth System, Marxism and Ecological Economics: Toward a Red and Green Political Economy, with more focus on critical history: Capitalism in the Web of Life: Ecology and the Accumulation of Capital, etc.

The Questionable:
Economics, Ideology and Real-world Imperialism:
--I gave this book 5-stars based on the technical tools it presents and its outreach to the science/engineering communities; both are crucial for contending with 21st century crises. A bonus is the lack of sugar-coating when it critiques useful idiot economists.
--However, I am weary of Keen’s Western reformist ideological framing (“For all its flaws, capitalism was and remains an exciting social system.), where “progressive�� means “progressive capitalism�� and the S-word is still stigmatized by the decolonization and rapid-industrialization of 20th century socialism. I’ve summarized this in reviewing fellow reformist Mazzucato’s sugar-coating in Mission Economy: A Moonshot Guide to Changing Capitalism.
--The bottom line is both Keen and I converge on “revolutionary reforms�� (another example is Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist) but we approach from different angles based on how we integrate geopolitics (esp. imperialism) into the economics of capitalism. Consider:

1) History of State creation of money + markets:
--Keen’s presentation of the State’s historical role here is crucial. However, the simplifying assumption made is the “State�� is a (prominent) Western state. The picture becomes more dynamic once we include the history of colonialism and Western colonial states' relationships with colonized state in terms of trade dependency through forced “free market�� extraction/deindustrialization and colonial monetary policies (foreign debt in foreign currencies, colonial taxation’s drain of wealth, etc.). See Capital and Imperialism: Theory, History, and the Present and .
--It’s important to note that Modern Monetary Theory (MMT) assumes a sovereign government (and a sovereign central bank) and is developed by US progressives; while MMT is important for US domestic welfare, it is crucial to recognize the global function of US dollar imperialism. Thus, MMT must be paired with the geopolitics of de-dollarization! (This is why Hudson is next-level: Super Imperialism: The Origin and Fundamentals of U.S. World Dominance; here's ).

2) Industrial Capitalism vs. Finance Capitalism?:
--Progressives like Keen can't help but idolize a figure on the “Right��: Joseph A. Schumpeter and his vision of entrepreneurial innovation. Similar to Hudson, there seems to be this idea of labour partnering with enlightened Industrial Capitalists to regulate Financial Capitalists and prevent the mutual destruction of Financial Crises. There’s a fine line between short-term pragmatism and long-term “revolutionary reforms��...
--I prefer Varoufakis�� framing of “networked corporations�� and the radical alternative of “corpo-syndicalism�� (synthesizing with anarcho-syndicalism/Worker Self-Directed Enterprises) on the production side described in Another Now: Dispatches from an Alternative Present (highly recommended for “revolutionary reforms��). Varoufakis also includes public banking/cooperative investments, while Keen is surprisingly tepid towards private banks (ex. government bonds provide a source of income to private banks which can incentivize them to speculate less and invest in production, uh, Hudson can you counter with the history of private banking?).
--Of course, Industrial Capitalism looks much more different once we consider imperialism. I cannot get over how Hudson completely flips a switch between romanticizing Industrial Capitalism (America's Protectionist Takeoff 1815-1914) vs. critiquing imperialism rather than synthesizing the contradictions, i.e. the triangular imperialist relationship where US/German industrialization relied on Britain’s open domestic markets and British capital exports, which Britain was only able to balance the accounts for due to its drain of colonial India.

3) War Economy and the Golden Age of Capitalism:
--When Keen does integrate geopolitics, he is a revelation. Keen mildly lays out the function of war in capitalism: capitalism has re-occurring Financial recessions where a normal (i.e. non-war) recovery renews credit but at rising levels of private debt (since these are the assets of the most-wealthy, thus it would be class war to wipe off). This private debt eventually builds up into a Depression.
...War is the one capitalist recovery rivaling Hudson’s Ancient Debt Jubilees in substantially altering the ratio between economic growth (fiat money creation + war production) beyond private debt levels, citing the startling ratio for the US Civil War, WWI and WWII (Hudson would add the debt forgiveness underlying the post-WWII German Economic Miracle, which targeted Nazi assets).
--Keen wants to get the private debt ratio back to where it was at the start of post-WWII’s “Golden Age of Capitalism��. The litmus test for progressives is always how they then explain the “s�ٲ����ڱ����پ��Dz��� that ended their precious Golden Age and allowed a twerp like Milton Friedman to take over and become a war criminal. Keen misses this when he simply states the baby boomers re-inflated the credit bubbles, but thankfully mentions the oil shocks in the footnotes; Hudson + Varoufakis can add the geopolitics of the US postwar plan: The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
--But we can go one step further (yes, imperialism) and consider the threat of Third World Industrialization + New International Economic Order (NIEO), i.e. your entire global capitalism is predicated on colonial-era cheap raw materials/energy/labour, hallelujah! (economics: ...politics: The Darker Nations: A People's History of the Third World)

...see comments for remainder of review...