Steve Keen

He said the mecca of the economist lies in evolutionary biology.

So he said evolution is necessary.

But we can't do that at the moment, so we use this construct of equilibrium.

Jevons probably said it in a more articulate way.

He said if we wanted to cover the actual behavior of the economy in all its complexity, and he literally used the word complexity, we should treat it as an issue of dynamics, process of change.

And everything is changing at all times in capitalism.

But those techniques are beyond us.

They said it would be foolish of us to not do the static analysis, even though it's imperfect.

And then what will happen is we'll do the static analysis, and then our successors will do the dynamic analysis.

Now, in fact, all the attempts they made to make the static models work the way they thought they worked failed.

And ironically, this case is made well by my good friend Yanis Varoufakis in one of his academic papers, that the failure to show that equilibrium applied in these static models led to the economists exalting equilibrium from a half-baked analytic technique of the 19th century to a serious proposition about the nature of capitalism.

So they distorted their theory to hang on to the belief that it reaches equilibrium.

And that has led to an enormous load of nonsense, which has also insulated economics from the developments in genuine sciences.

So it looks like a mathematically sophisticated discussion.

to anybody looking at it from the outside, but it's mathematically simplistic because they're leaving out processes of change.

And they argue they do it in what they call dynamic stochastic general equilibrium models today.

But everything's twisted to be equilibrium when modern sciences have well and truly transcended that and realized that most realistic dynamic and evolutionary systems exist far from equilibrium.

And you need analysis which enables far from equilibrium dynamics to be covered.

And economic theory is completely incapable of doing that.

And if they do it, the rest of the edifice collapses.