What Bitcoin Did
#134 - Steve Keen - How Modern Economics Became Ideology
AI Summary
In this episode, heterodox economist Steve Keen argues that modern economics has become ideology, critiquing neoclassical, Keynesian and Austrian models for ignoring how banks create money and how private debt drives crises. He explains the mechanics of money creation, the true drivers of inflation, and how housing finance and mounting debt have eroded the middle class, while highlighting the political illusion of left‑right consensus on economic policy. Keen outlines what a reality‑based economic model would look like and offers guidance for younger generations navigating a debt‑laden system, calling for a post‑ideological reform of economics.
Episode Description
Modern economics is built on competing theories that often describe the world in very different ways. In this conversation, economist Steve Keen sets out his explanation for how money works, why he believes mainstream economic models fail, and why debt, banking and housing play a far greater role in economic crises than most policymakers acknowledge.
Keen's perspective challenges the assumptions of neoclassical, Keynesian and Austrian economists alike.
In this episode we discuss:
– How economics became political ideology
– Why neoclassical theory broke the West
– The Left vs Right illusion in economic policy
– What money really is (and how banks actually create it)
– Why inflation is misunderstood by almost everyone
– How private debt fuels instability and inequality
– Housing, mortgages & the destruction of the middle class
– Why equilibrium economics is fantasy
– What a sane, reality-based economic model looks like
– How young people can survive a debt-driven system
Economics didn't fail by accident — it failed because ideology replaced reality.
Steve Keen is one of the world's leading heterodox economists, known for his critiques of mainstream theory and his work on private debt, banking, financial instability and the 2008 crisis, which he warned about years in advance.
TIMESTAMPS:
00:00:00 – Introduction
00:03:12 – Why Economics Became Ideology
00:09:04 – Economists vs Reality
00:14:47 – How Money Actually Works
00:21:18 – Banks, Loans & Money Creation
00:33:44 – Inflation: What Really Drives It
00:38:59 – Wages, Markups & Bargaining Power
00:47:55 – The Housing Crisis Explained
00:54:03 – Deregulation & the Death of Affordability
00:59:22 – Middle Class Collapse
01:04:48 – Left and Right Get Economics Wrong
01:11:02 – Neoclassical Economics
01:17:26 – The Problem With Economic Models
01:22:31 – Why Economists Misunderstand Production
01:28:08 – AI, Automation & The Future of Work
01:44:28 – Structural Failures
01:55:46 – Can Government Use Good Economics?
02:01:23 – Global Debt, Fragility & Future Crises
02:06:40 – What Would Real Reform Look Like?
02:13:28 – Why Young Generations Feel Hopeless
02:19:47 – Can We Build a Post-Ideological Economics?
02:25:10 – Final Thoughts
CONTACT PETE
› Website – http://petermccormack.com
› Feedback – https://www.petermccormack.com/contact
› Email – me@petermccormack.com
› Instagram – /mccormack555
› X/Twitter – https://x.com/petermccormack/
CONNECT WITH STEVE KEEN
› Website – https://www.patreon.com/ProfSteveKeen
› Twitter – https://x.com/profstevekeen
SPONSORS
› IREN - https://www.iren.com/
› Ledger - https://www.ledger.com/
› Gemini - https://gemini.com/
LISTEN / SUBSCRIBE
› Apple Podcasts: https://apple.co/40ruY9K
› Spotify: https://spoti.fi/3Wc94Vu
› Fountain: https://bit.ly/FountainPM
› YouTube: https://bit.ly/YouTube_PM
› Rumble: https://bit.ly/RumblePM
FILMED BY CURTIS TAYLOR
› https://www.curttaylor.co.uk/
› https://x.com/curttayloruk/
EDITED BY CONOR MCCORMACK
› https://x.com/ConorM04
Show Notes
Modern economics is built on competing theories that often describe the world in very different ways. In this conversation, economist Steve Keen sets out his explanation for how money works, why he believes mainstream economic models fail, and why debt, banking and housing play a far greater role in economic crises than most policymakers acknowledge.
Keen's perspective challenges the assumptions of neoclassical, Keynesian and Austrian economists alike.
In this episode we discuss:
– How economics became political ideology
– Why neoclassical theory broke the West
– The Left vs Right illusion in economic policy
– What money really is (and how banks actually create it)
– Why inflation is misunderstood by almost everyone
– How private debt fuels instability and inequality
– Housing, mortgages & the destruction of the middle class
– Why equilibrium economics is fantasy
– What a sane, reality-based economic model looks like
– How young people can survive a debt-driven system
Economics didn't fail by accident — it failed because ideology replaced reality.
Steve Keen is one of the world's leading heterodox economists, known for his critiques of mainstream theory and his work on private debt, banking, financial instability and the 2008 crisis, which he warned about years in advance.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
TIMESTAMPS:
00:00:00 – Introduction
00:03:12 – Why Economics Became Ideology
00:09:04 – Economists vs Reality
00:14:47 – How Money Actually Works
00:21:18 – Banks, Loans & Money Creation
00:33:44 – Inflation: What Really Drives It
00:38:59 – Wages, Markups & Bargaining Power
00:47:55 – The Housing Crisis Explained
00:54:03 – Deregulation & the Death of Affordability
00:59:22 – Middle Class Collapse
01:04:48 – Left and Right Get Economics Wrong
01:11:02 – Neoclassical Economics
01:17:26 – The Problem With Economic Models
01:22:31 – Why Economists Misunderstand Production
01:28:08 – AI, Automation & The Future of Work
01:44:28 – Structural Failures
01:55:46 – Can Government Use Good Economics?
02:01:23 – Global Debt, Fragility & Future Crises
02:06:40 – What Would Real Reform Look Like?
02:13:28 – Why Young Generations Feel Hopeless
02:19:47 – Can We Build a Post-Ideological Economics?
02:25:10 – Final Thoughts
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
CONTACT PETE
› Website – http://petermccormack.com
› Feedback – https://www.petermccormack.com/contact
› Email – me@petermccormack.com
› Instagram – /mccormack555
› X/Twitter – https://x.com/petermccormack/
CONNECT WITH STEVE KEEN
› Website – https://www.patreon.com/ProfSteveKeen
› Twitter – https://x.com/profstevekeen
SPONSORS
› IREN - https://www.iren.com/
› Ledger - https://www.ledger.com/
› Gemini - https://gemini.com/
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LISTEN / SUBSCRIBE
› Apple Podcasts: https://apple.co/40ruY9K
› Spotify: https://spoti.fi/3Wc94Vu
› Fountain: https://bit.ly/FountainPM
› YouTube: https://bit.ly/YouTube_PM
› Rumble: https://bit.ly/RumblePM
FILMED BY CURTIS TAYLOR
› https://www.curttaylor.co.uk/
› https://x.com/curttayloruk/
EDITED BY CONOR MCCORMACK
› https://x.com/ConorM04
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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