Steve Keen

Keen has attempted to counter Karl Marx's theory (in his view Marx's pre-1857 view, specifically) from a post-Keynesian perspective, by arguing machines can add more product-value over their operational lifetime than the total value of depreciation charged "during those asset lives".

For example, the total value of sausages produced by a sausage machine over its useful life might be greater than the value of the machine.

Depreciation, he implies, was the weak point in Marx's social accounting system all along.

Keen argues all factors of production can add new value to outputs.

However he gives credit to Marx for contributing to the "financial instability hypothesis" of Hyman Minsky.

Keen's book closes with a survey of various schools of heterodox economics, concluding "None of these is at present strong enough or complete enough to declare itself a contender for the title of 'the' economic theory of the 21st century."

However, he argues neoclassical economics is a degenerative research program, not generating new knowledge.

It primarily grows a belt of protective auxiliary hypotheses to shield its core beliefs from critique.

There is an accompanying website which provides more detailed mathematical expositions.

Keen has challenged the core, elementary textbook neoclassical theories of Perfect competition and Monopoly, and in particular the argument that firms in "perfect competition" and monopolies are usefully thought of as representing polar opposites.

Keen has referred to this as "the theory of the firm."

Neoclassical textbooks define a firm acting without any strategic awareness of the effect of its output choice on price as representing "perfect competition" and argue that this condition of "perfect competition" can be represented analytically by a horizontal demand curve facing the firm -- the firm acts as if it believes it can sell whatever it produces at the currently prevailing price, but nothing at any higher price; marginal costs for this firm, it is presumed, are rising and the firm does not want to sell more at the current price or a lower price.

Something like such a state of affairs, it is sometimes argued, is approached as the number of firms competing in a market approaches infinity and the effect of any one firm's output decision on the overall market price becomes infinitesimal and can be practically disregarded by the individual firm in its decision-making.

By contrast a firm with strategic awareness that its output decision markedly affects the market price, faces, presumptively, a downward-sloping demand curve: expanding the rate of output sold depresses market price.

In general, elementary neoclassical textbook presentations hold that all "profit-maximizing" firms will set marginal revenue equal to marginal cost.

For the firm in "perfect competition", this means price = marginal revenue = marginal cost = average (unit) cost and no profit.

For the "monopoly" firm aware that its output choice affects price, the "profit-maximizing" choice is to choose a rate of output where marginal cost = marginal revenue, but in the monopolist's case, that will mean constraining output to raise price above marginal cost.

Keen challenges the theory and pedagogy of "perfect competition" and "monopoly" as polar opposites from multiple angles, arguing that they are contradictory and incoherent taken as a whole.

Steve Keen (born 28 March 1953) is an Australian economist and author.

He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific, and empirically unsupported.

Keen was born in Sydney in 1953.

His father was a bank manager.

Keen graduated with a Bachelor of Arts in 1974 and a Bachelor of Laws in 1976, both from the University of Sydney.

He then completed a Diploma of Education at the Sydney Teachers College in 1977.

In 1990, he completed a Master of Commerce in economics and economic history at the University of New South Wales.

He completed his PhD in economics at the University of New South Wales in 1997.

Most of Steve Keen's recent work focuses on modeling Hyman Minsky's financial instability hypothesis and Irving Fisher's debt deflation.

The hypothesis predicts an overly large private debt to GDP ratio, can cause deflation and depression.

Here, the falling of the price level results in a continually rising real quantity of outstanding debt.

Moreover, the continued deleveraging of outstanding debts increases the rate of deflation.

Thus, debt and deflation act on and react to one another, resulting in a debt-deflation spiral.

The outcome is a depression.

Keen's full-range critique of neoclassical economics is contained in his book Debunking Economics.

Keen presents a wide variety of critiques on neoclassical economic theory.

He argues they show neoclassical assumptions which are fundamentally flawed.

Keen claims several neoclassical assumptions are empirically unsupported (that is, they are unsupported by observable and repeatable phenomena) nor are they desirable for society at large (that is, they do not necessarily produce either efficiency or equity for the majority).

He argues economists' overall conclusions are very sensitive to small changes in these assumptions.

Keen was formerly an associate professor of economics at University of Western Sydney, until he applied for voluntary redundancy in 2013, due to the closure of the economics program at the university.

In 2014, he became a professor and Head of the School of Economics, History and Politics at Kingston University in London.

He has since taken retirement and is crowd source funded to undertake independent research as well as being a Distinguished Research Fellow at the Institute for Strategy Resilience & Security, University College London.