Macro N Cheese
What Marx Got Wrong with Steve Keen
May 22, 2021
Steve Keen believes Marx contradicted himself. Maybe socialist revolution isn’t inevitable after all? You don’t need to have studied the labor theory of value to listen to this episode, but you may want to after you’ve heard it.
Steve Keen can be counted on to bring a unique and controversial perspective. This time he turns his critical gaze toward what some feel is sacred in Marx’s legacy. The interview takes a dive into complex theory, which we won’t even attempt to summarize here.

Keen says Marx’s philosophical thinking ultimately transcended his own labor theory of value which asserts that all surplus value derives solely from labor. In the Grundrisse, he acknowledges the role of machinery in the production process showing that, with its input into production, machinery can be a source of surplus value.

Keen believes this disproves the tendency of the rate of profit to fall. Therefore, socialist revolution is not inevitable. According to Keen, however, after contradicting his own basis for scientific socialism, Marx refused to give it up.

Let's get one thing clear... I regard Marx as one of the greatest intellects in economics, probably the greatest. So I put him above Keynes, comparable to Schumpeter. I regard Schumpeter as an incredibly original thinker. And if I want to see my pantheon of great economists, it starts with Richard Cantillon, leaps to François Quesnay, jumps over Ricardo and Smith, and lands on Marx.

At one point in the interview, Grumbine brings up the necessity of a future built around green energy. Keen goes into the laws of thermodynamics, the transition from high frequency energy to low frequency energy, and the law of entropy.

Grumbine reminds Keen of his last visit to Macro N Cheese, when he called attention to the breakdown in the global supply chain during the pandemic. This gets them talking about the need for, in Keen’s words, “a symbiosis between central control and distributed control.”

There’s so much more to this episode. We said we wouldn’t attempt to summarize it, but we’re providing plenty of resource material in the “Extras” page. If you’re not listening on the Real Progressives website, be sure to check it out. There’s a transcript of the interview as well. You may need it.

Professor Keen is a Distinguished Research Fellow at UCL and the author of “Debunking Economics,” “Can We Avoid Another Financial Crisis?” and his latest “The New Economics: A Manifesto.” He is one of the few economists to anticipate the Global Financial Crisis of 2008, for which he received a Revere Award from the Real World Economics Review. His main research interests are developing the complex systems approach to macroeconomics, and the economics of climate change.

@ProfSteveKeen on Twitter

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