I entered academia in my mid-30s after working in several roles, including school teacher, journalist, conference organiser and computer programmer. My research focus has been developing complex systems models of the economy based on the Financial Instability Hypothesis which was developed by the maverick economist Hyman Minsky. In 2006, this work led me to expect that a serious economic crisis would occur, and I took to the mainstream and social media to warn about it.
I am continuing both aspects of this work at Kingston, as well as developing a curriculum in economics in line with student demands for pluralism that have arisen since the economic crisis of 2008.
I have designed a computer program that I named Minsky (in honour of Hyman Minsky) to facilitate the development of complex, monetary models of the economy. It is an Open Source program which runs on PCs, Macs and Linux (though the Mac version runs very slowly!) and can be downloaded for free from the SourceForge software repository.
My current research is using this platform to show the importance of money and private debt in macroeconomics – topics which mainstream economic theory ignored before the crisis. My ambition is to develop a system by which large scale dynamic, non-equilibrium models of the global economy can be constructed. In time I hope these will supplant the equilibrium-fixated, essentially non-monetary models that dominate economics today, and were the reason that most economists had no idea that the economic crisis of 2008 was imminent.
Fundamentally, I'm passionate about knowledge as opposed to ideology. I also love tennis and keeping fit.
The economic crisis occurred in part because mainstream economists developed a non-monetary, equilibrium approach to modelling the economy that led them to ignore the fundamental factor that caused it – a private debt bubble that, when it collapsed, caused demand to collapse with it. Since the crisis, both major political parties have clung to a naïve version, even of that theory, that blames the public sector for the crisis.
My research identifies the real cause of the crisis, and also indicates how we can overcome its aftermath. Unfortunately that involves doing the exact opposite of what major political parties believe is necessary: deficits rather than austerity, and private debt cancellation (in a way that doesn't discriminate against savers) rather than protecting the short-term interests of the banks.
If my research were applied, then the economic stagnation we're experiencing could be overcome – though as a professional sceptic, I would want to test my ideas in small doses to make sure they actually worked before they were implemented on a large scale.
I'd make people aware that the world we live in is a complex system where simple remedies to complex problems normally don't work as expected. This is because, in a complex system, the feedback effects from what we do usually dominate the direct effect of our actions.
Collectively we behave like an amateur driver who gets into a skid while turning right, and turns the wheel harder to the right, which only makes the skid worse. A professional driver knows that, to control a skid, you turn in its direction – which means that to go right in a skidding car, you turn the wheel to the left.
If people, politicians and economists in particular, understood complex systems, then catastrophes like the economic crisis could be avoided. Capitalism would still be unstable, but it wouldn't collapse into stagnation and stay there, as it has done.
I would extend Minsky's capabilities to the point where it could simulate the global economy, and assemble a team of capable economic modellers, statisticians, mathematicians, historians, sociologists and psychologists to develop a comprehensive global economic model. I'd make sure that it was a visual system that could actually be explained to politicians, and would in fact let them "test run" policy ideas before implementing them in practice. I think it would result in better – and more modest – economic policies than we tend to get today.
Kingston University sits outside the mainstream economics establishment, along with other institutions such as Greenwich, Leeds, West England, SOAS and Goldsmiths College. As a consequence, Kingston has become a haven for non-orthodox economists. I therefore have colleagues at Kingston who are themselves leaders in heterodox economics, and who completely understand the need to reform the discipline. Developing both a novel research orientation and a pluralist economics curriculum is therefore much easier at Kingston than it would be at a university like Oxford or Cambridge. As I tell students, at talks I give around the world, if you want a pluralist education in economics, come to Kingston. The same applies to potential staff: non-orthodox economists who want to work somewhere where quality research outside the mainstream is valued, Kingston is the place for you.
Find out more about Steve Keen on his staff profile page or see his: