Steve Keen: Marxism, Capitalism, and Economics | Lex Fridman Podcast #303

The real foundation of Marx's political philosophy was the economic argument that there, there would be a tendency for the rate of profit to fall, and that tendency for the rate of profit to fall would lead to capitalists battening down on workers harder, paying them less than g- his subsistence. Uh, a revolt by workers against this, and then you would get socialism on the other side. So his, he, the, what he called the tendency for the rate of profit to fall played a critical role in his explanation for why socialism would have to come about. If you look at Marx's own vision of the revolution, it was gonna happen in England, okay? The advanced economies would be first to go through the revolution. The socialist, the, the, the primitive economies would have to go through a capitalist transition. And this is the difference when the Mensheviks and the, and the Bolsheviks. So the Mensheviks... And Hyman Minsky came out of the Menshevik family. The Mensheviks believed you had to go through a capitalist phase. Russia had to go through a capitalist period before it becomes socialist. The Bolsheviks believed they could get there in one go.

The following is a conversation with Steve Keen, a brilliant economist that criticizes much of modern economics and proposes new theories and models that integrate some ideas and ditch others from varied thinkers, from Karl Marx to John Maynard Keynes to Hyman Minsky. In fact, a lot of our conversation is about Karl Marx and Marxian economics. He has been a scholar of Karl Marx's work for many years, so this was a fascinating exploration. He has written several books I recommend, including The New Economics: A Manifesto and Debunking Economics. This is the Lex Fridman Podcast. To support it, please check out our sponsors in the description. And now dear friends, here's Steve Keen. Let's start with a big question. What is economics? Or maybe what is or should be the goal of economics?

Well, it should be to understand how human civilization comes about and how it can be maintained. Uh, and that's not what it's been at all. Uh, so we have a, a discipline which has the right name and the wrong soul.

What is the soul of economics?

The soul of economics really is to explain how do we manage to build a civilization that elevates us so far above the energy and, and consumption and knowledge levels of the base environment of the Earth? 'Cause if you think about it, and this is actually working from, uh, work I've learned from Tim Garrett, who's one of my research colleagues, who's an atmospheric physicist. And his idea is that we have these, we exploit these high-grade energy sources, from the, the sun itself to coal, nuclear, et cetera, et cetera, which means we can maintain a level of human civilization well above what we'd have if we were just still running around with rocks and stones and spears. So it's that elevation above the base level of the planet which is human civilization. And if we didn't have this energy we were exploiting, if we didn't use the environment to elevate ourselves above what's possible in the background, then you and I wouldn't be talking into microphones, you know?