:00:00. > :00:07.Now on BBC News, it is time for HARDtalk.
:00:08. > :00:16.Welcome to HARDtalk, I'm Stephen Sackur.
:00:17. > :00:22.Good to be an economist who swims against the tide of conventional
:00:23. > :00:28.wisdom -- it is a good time to be an economist.
:00:29. > :00:34.After all, the last decade has seen classical economics take a beating.
:00:35. > :00:36.The great financial crash was not supposed to happen,
:00:37. > :00:37.nor was prolonged eurozone stagnation.
:00:38. > :00:41.Now, the liberal economic consensus is that Brexit will be a disaster,
:00:42. > :01:01.We shouldn't, according to my guest, the acclaimed Economist Steve Keen.
:01:02. > :01:15.Amidst all the arguments, do any economists deserve our trust?
:01:16. > :01:27.Delighted to be here again. You describe yourself as an anti-
:01:28. > :01:31.economist. Does that mean that you just listen to what all of the sort
:01:32. > :01:36.of bastions of economic collective wisdom say, from the US Fed to the
:01:37. > :01:41.UK Treasury, to the IMF, and you just think I will say exactly the
:01:42. > :01:45.opposite? That wouldn't be a bad strategy, but no. There has been on
:01:46. > :01:49.alternative strand in economics throughout its history, going right
:01:50. > :01:52.back to the days before we even had what we call economics, back in the
:01:53. > :01:55.days of William Petty and so on. And I have been part of the contrarian
:01:56. > :02:01.tradition which can properly date back to about 1810. All right,
:02:02. > :02:07.things have changed a little bit since 1810. Yes. The orthodoxy has
:02:08. > :02:11.changed somewhat. It has changed radically, it has switched around,
:02:12. > :02:14.the orthodoxy really began in the 1970s, but that has been towards
:02:15. > :02:19.capitalism which tends towards equilibrium. It wasn't because the
:02:20. > :02:22.people who believe the stuff believed it, I'm talking about
:02:23. > :02:27.Marshall and so are back in those days. It wasn't possible to analyse
:02:28. > :02:32.the economy unless you assumed it was an equilibrium. So what was
:02:33. > :02:35.technical, became conventional wisdom on the 20 century.
:02:36. > :02:40.Capitalism, whatever else it might have is a strength, equilibrium is
:02:41. > :02:43.not one of them. But are you a capitalist? In a fundamental sense I
:02:44. > :02:47.am. I'm a great fan of entrepreneurs and innovators, I think capitalism
:02:48. > :02:52.is the second-best social system in for bringing about innovation. The
:02:53. > :02:55.first was back in Cro-Magnon days, by the way. So it is dramatically
:02:56. > :03:00.better than feudalism, certainly better than straight socialism, and
:03:01. > :03:03.I think that is inherent. It is not just because of Stalin, capitalism
:03:04. > :03:07.does give you more innovation but it also gives you financial bubbles and
:03:08. > :03:10.Ponzi schemes. Right, and I want to get to the nitty-gritty of where you
:03:11. > :03:13.see the particular problems and where you might see things like
:03:14. > :03:17.Ponzi schemes developing again. But before we get there, just one more
:03:18. > :03:21.question about your mindset. Because it does seem to be quite important
:03:22. > :03:24.to establish how you think. You call yourself a contrarian, and they come
:03:25. > :03:27.back to this idea that there is something knee-jerk and very
:03:28. > :03:30.creditable about being a contrarian, because the whole idea is that you
:03:31. > :03:34.take what the consensus is, right now the consensus, going back to the
:03:35. > :03:39.beginning of my first question, the consensus is Lily around a form of
:03:40. > :03:42.liberal economics that perhaps the IMF epitomises. Your knee-jerk
:03:43. > :03:46.reaction is simply to think always that they are wrong. No, I can
:03:47. > :03:49.analyse what they say and work out whether they are right or wrong.
:03:50. > :03:54.They can be right eye accident, so in many ways the most commercial
:03:55. > :03:57.economists are in favour of governments running Budget deficits,
:03:58. > :04:01.for example, which is not what you see coming out of the political
:04:02. > :04:07.class, so I find myself signing petitions that Paul Krugman might
:04:08. > :04:09.also have his name on. It is a question of analysis, how do you
:04:10. > :04:13.think about capitalism? What questions you ask yourself about the
:04:14. > :04:16.social system, that directs what information you look forward to try
:04:17. > :04:24.understand why it operates? They ask a question, can disaggregated,
:04:25. > :04:27.system of economy produced results? My question is, what caused the
:04:28. > :04:31.great depression and can we avoid having another one? I think that is
:04:32. > :04:35.a better question. Right, well, it is a very big question. And I don't
:04:36. > :04:38.want to ignore it and I want to start with something very specific
:04:39. > :04:41.and then sort of actually get to the bigger picture. And the specific
:04:42. > :04:44.thing I want to get to, because you have made quite a lot of noise about
:04:45. > :04:52.it and you have swum against the tide in doing so, is Brexit. Why do
:04:53. > :04:55.you believe, again, the collective wisdom from all the organisations
:04:56. > :05:00.are mentioned, the UK government itself, the astute of fiscal studies
:05:01. > :05:05.and elsewhere as well, they all say that the Brexit decision is going to
:05:06. > :05:10.have a material and damaging effect on the UK economy. How can you be so
:05:11. > :05:14.sure they're wrong? Well, I'm not. Actually, my reason for voting for
:05:15. > :05:18.Brexit was not because I thought it was going to be better for the
:05:19. > :05:21.British economy than remain. There are good arguments that they will be
:05:22. > :05:24.a certain amount of damage to the economy from leaving, an
:05:25. > :05:28.institutional structure like the European Union. My main reason for
:05:29. > :05:35.voting for Brexit, I suppose it is the Groucho Marx question. I think
:05:36. > :05:39.it is not only an ineffective club at a dangerous club for the health
:05:40. > :05:42.of Europe. It is going to fall apart at some stage, it might as well
:05:43. > :05:45.start by a polite exit by the English rather than a rude one by
:05:46. > :05:52.the French. For a start we should set the British, not English. Sorry
:05:53. > :05:55.about that. That's OK. I am still learning. But the point is we look
:05:56. > :05:58.at the impact of Brexit, and all the surveys show it, from business
:05:59. > :06:02.confidence to investment decisions, we see already that the impact of
:06:03. > :06:06.uncertainty is quite profound. And that all of the growth forecast for
:06:07. > :06:11.the future have been downsized. Britain is going to suffer as a
:06:12. > :06:16.result. It is having some pain. I mean, some of that pain is
:06:17. > :06:19.necessary. A large part of it is to unwind a housing bubble you've got
:06:20. > :06:21.here, which is as is as bad as the one I come from back in Sydney.
:06:22. > :06:24.There are elements like that that have to happen. At in terms of the
:06:25. > :06:30.current impact it is all upon uncertainty. Now, we were trying to
:06:31. > :06:34.say we are at certain before Brexit and uncertain after? It is the age
:06:35. > :06:37.of uncertainty on that. Well, there are certain certainties that we
:06:38. > :06:40.lived with and actually the British economy benefited from, one was the
:06:41. > :06:44.single market. It meant tariff free trade right across Europe. And that
:06:45. > :06:47.is hugely important because if we could negotiate the same deal the
:06:48. > :06:51.Americans have we go from having no tariffs whatsoever... And that is
:06:52. > :06:54.the nature of the uncertainty. You have said very confidently that I am
:06:55. > :06:58.sure if we go into a third-party deal with the European Union, I'm
:06:59. > :07:00.sure we are going to get a great tariff agreement with them and with
:07:01. > :07:04.the rest of the world as well. It comes back to the credibility of
:07:05. > :07:09.economist. Because tariff wars used to be a big issue in the 50s and 60s
:07:10. > :07:14.and one thing my anti- profession has done is demolished tariff walls
:07:15. > :07:18.around the world. Tariffs used to average about 30%, you know what the
:07:19. > :07:24.average tariff is between Europe and the -- America and the European
:07:25. > :07:28.Union? 3%. One of the most important experts from the UK says it leaves
:07:29. > :07:33.10% on the price of cars, that is a really big deal. And our currency
:07:34. > :07:36.has fallen by 15 or 20%. There are ups and downs in both of these
:07:37. > :07:41.processors, and a large part of what has happened to England in the last
:07:42. > :07:43.30 or so years, certainly in comparison to Germany, is the
:07:44. > :07:47.deindustrialisation of the country. Now, partly that is because you have
:07:48. > :07:50.had an overvalued exchange rate, in my opinion. That exchange rate
:07:51. > :07:54.plunged after Brexit and is likely to remain low. So yes, you are going
:07:55. > :07:57.to face a tariff on cars of maybe around 10% but you are looking at a
:07:58. > :08:00.general reduction in your export prices of 20%. So there are swings
:08:01. > :08:04.and roundabouts here which are taken into consideration by the
:08:05. > :08:15.mainstream. Look at the way the British economy works. A very
:08:16. > :08:18.significant chunk of the national GDP comes from the city of London
:08:19. > :08:20.from the financial sector, banking, insurance and all that goes with it.
:08:21. > :08:22.There are significant institutions like Deutsche bank, who are already
:08:23. > :08:24.saying they are on the mentally reviewing their investment
:08:25. > :08:26.commitment, strategic commitment to the UK, because of the Brexit
:08:27. > :08:29.decision. Financial services are going to take a real hit. Not as big
:08:30. > :08:32.as people make out it was the main reason the financial sector is
:08:33. > :08:34.located here is number one the language you and I are both using,
:08:35. > :08:37.English, is the language of international trade. It won't become
:08:38. > :08:41.German or French or Italian or anything else in the meantime also,
:08:42. > :08:45.most contract negotiated in English law. That is major strength of
:08:46. > :08:48.financial sector gets out of locating here that it won't get in
:08:49. > :08:54.Frankfurt. They will talk about it, they are good at talking up how
:08:55. > :08:56.deadly, the world is going to end if they leave the country tomorrow. The
:08:57. > :08:59.financial sector is very good at causing a panic but in fact making a
:09:00. > :09:01.final action in deciding to move all their facilities from here to
:09:02. > :09:06.Frankfurt, I can't see it happening. I can see them changing their
:09:07. > :09:09.waiting. And they have to take seriously the words that come out of
:09:10. > :09:13.Paris, for example, or the words that come out of the mouth of the
:09:14. > :09:18.German Finance Minister. These are people in Europe who are saying,
:09:19. > :09:21.look, apart from anything else, to ensure the stabilisation of the rest
:09:22. > :09:26.of the European Union, to ensure we stay together, we have two sent a
:09:27. > :09:31.very clear message about Britain, that if you leave you suffer the
:09:32. > :09:35.consequences. And look what they have done to Greece and Spain. That
:09:36. > :09:39.is not the behaviour of a democratic system. That is autocratic
:09:40. > :09:43.behaviour. You can call it what you like. You are not a politician, you
:09:44. > :09:48.are an economist. I am not going to be an economic Chamberlain. What do
:09:49. > :09:51.you mean? I am not going to say we have to stay there for the sake of
:09:52. > :09:53.peace in our time and lock ourselves into a policy system which exactly
:09:54. > :09:57.causing the collapse of Europe. That is what the European Union and in
:09:58. > :10:00.particular the euro is doing. The sooner the euro is ended, the better
:10:01. > :10:04.for the state of the global and the painful it will be in transition,
:10:05. > :10:07.the better it will be for the countries of Europe. Just a final
:10:08. > :10:10.point and then we will move on. One of your best friends in the world of
:10:11. > :10:14.economic thinking is the former Greek Finance Minister. I have had
:10:15. > :10:17.in the studio, and he said you know what, clearly I have a lot of
:10:18. > :10:19.problems with the European Union but I still think fundamentally it would
:10:20. > :10:26.be the wrong and a dangerous decision for the UK to leave the
:10:27. > :10:31.European Union. That is where Yanis and I differ, on a political front,
:10:32. > :10:33.not economic. Yanis is trying to find ways that currently
:10:34. > :10:36.dysfunctional systems can be made to work. That is what he tried to do
:10:37. > :10:39.with what he called his modest proposal for reforming the euro
:10:40. > :10:42.which it had had a thin taken on board would have been far better for
:10:43. > :10:45.Greece and most of Europe and what was actually done. I just don't
:10:46. > :10:50.think you can pay Wolfgang Schauble to think outside the liberal
:10:51. > :10:53.framework he is in sight. It is like telling somebody to reform a
:10:54. > :10:56.marriage from inside, don't leave your husband, persuade him not to
:10:57. > :11:00.bash you any more. I'm sorry, from what you're even saying here is they
:11:01. > :11:03.will bash is more of we try to leave, so let's not leave. That is a
:11:04. > :11:05.very failed strategy for the long-term if you are going to
:11:06. > :11:10.continue getting bashed as a result of staying where you are. And your
:11:11. > :11:13.analysis of the European Union and in particular the eurozone are
:11:14. > :11:17.absolutely doomed, no question in your mind? IMac I believe so, going
:11:18. > :11:21.back to another classic contrarian English economist who wrote in 1992
:11:22. > :11:25.that given the way the euro has been defined, the only outcome is to be
:11:26. > :11:32.immigration as an alternative to starvation or death. Now, he wrote
:11:33. > :11:38.that in 1982, when the ink was still drying on Maastricht Treaty. And
:11:39. > :11:41.people saw him as ludicrous. I had to be carrying on from his work in
:11:42. > :11:46.saying we should never have joined, the euro should never have been
:11:47. > :11:50.created, let's be created. Funnily enough, while you predict a meltdown
:11:51. > :11:55.for the European Union, that isn't the real driver of your conviction
:11:56. > :12:00.that there is going to be before too long another financial crisis across
:12:01. > :12:03.the world. I mean, that is driven less by a particular political event
:12:04. > :12:07.like the breakup of the European Union, for you. It is driven much
:12:08. > :12:13.more by your analysis that the world is still drowning in debt. Private
:12:14. > :12:16.debt, that's right. Yes. And that is what is ignored by the mainstream,
:12:17. > :12:19.which is why I am an anti- economist. They fundamentally ignore
:12:20. > :12:29.private debt and say government debt the problem. My argument, which
:12:30. > :12:34.comes from Hyman Minsky's work and Fisher before him, is that private
:12:35. > :12:37.debt causes demand in the economy, but there is a tendency in
:12:38. > :12:40.capitalism for the debt level to rise over time to the point where
:12:41. > :12:43.you have so much debt that you can't serve service at any more and you
:12:44. > :12:47.have a crisis like we are going through. You say you can't service
:12:48. > :12:51.at any more but it is quite easy to service because interest rates are
:12:52. > :12:53.lower than they have been before, in some countries they are pretty much
:12:54. > :12:58.negative, and governments are making the money supply more easy to get
:12:59. > :13:02.your hands on than ever before. Actually, they are pumping up the
:13:03. > :13:06.money and banking systems own internal circulation, not in our
:13:07. > :13:10.actual pockets. Well, it has a knock-on effect, that is the
:13:11. > :13:14.argument. No, it doesn't. Nothing like it, this is a bad argument.
:13:15. > :13:18.Printing money as they do, it reaches the real economy. And they
:13:19. > :13:21.are wrong, they are convinced by them and the Bank of England is now
:13:22. > :13:25.saying that in its own research papers, if you go back to the thing
:13:26. > :13:28.about money creation in the modern economy, they said boosting reserves
:13:29. > :13:32.does not create extra money in the private monetary system, so it is
:13:33. > :13:35.not a successful policy. Well, you are absolutely convinced they are
:13:36. > :13:40.wrong, but let's be honest. You have been wrong as well. I was going to
:13:41. > :13:43.say this session, that is rude, it is a preoccupation you have private
:13:44. > :13:46.debt in the levels of private debt around the world. You have had it
:13:47. > :13:51.for sometime. I mean, you had it in your home country, Australia, he
:13:52. > :13:54.said back in 2010 Australia's body market heading to make heading for a
:13:55. > :13:57.crash, he said prices were going to fall by up to 40% and because of the
:13:58. > :13:59.degree to which Australians are leveraged into the property market
:14:00. > :14:02.it is going to kill the Australian economy. You are dead wrong.
:14:03. > :14:07.Australia hasn't had a recession for, what, 25 years.
:14:08. > :14:13.We have borrowed an additional 50% of GDP than it had in 2008. And I
:14:14. > :14:19.would say so what because the economy is growing at 3% growth,
:14:20. > :14:23.inflation of 1%, Australians are quite happy. And so were Americans
:14:24. > :14:28.in 2007 until July. These things come to a crunch and it isn't... You
:14:29. > :14:35.said that six years ago. And they borrowed their way out of it. You
:14:36. > :14:39.said, I am going to walk from Canberra to Australia's highest
:14:40. > :14:42.mountain 225 kilometres if I am wrong on this issue. You were dead
:14:43. > :14:49.wrong and you have to put your walking boots on. Take the expiry of
:14:50. > :14:52.that bet as 2023. You have done the walk already. To shut up the
:14:53. > :14:56.property lobby. It worked very effectively. They felt you were
:14:57. > :14:59.saying the crash was coming and that is why you felt... When you say
:15:00. > :15:05.property will fall over the lobby goes over you like a mad dog. I went
:15:06. > :15:09.in as an academic expecting to have academic debates and they can be
:15:10. > :15:13.nasty, but the property lobby to fight anyone who goes against their
:15:14. > :15:16.mantra is to attack on any grounds. You told me you would never at ease,
:15:17. > :15:20.you would never tailor your message... I didn't appease, I got
:15:21. > :15:24.on the second page of the Sydney Morning Herald and rub their noses
:15:25. > :15:28.in it. Let's talk China Vanke on the if we are going around Steve Keen's
:15:29. > :15:31.predictions and the degree to which they are not coming true, you for a
:15:32. > :15:39.while have said the Chinese economy is heading for a massive fall. Right
:15:40. > :15:45.now it is growing at a steady 7%. Do you know what unemployment is? No
:15:46. > :15:48.one knows. Exactly, 4.5%. It has been for seven years. The statistics
:15:49. > :15:52.that matter are talking about a crunch and the government response
:15:53. > :15:56.is to try to pump up the economy. They can manage to do that because
:15:57. > :15:59.they have such an amalgam of a private and state system, they can
:16:00. > :16:03.flit from private to government funding very easily, but they still
:16:04. > :16:06.have massively over in vested and they are suffering a dramatic
:16:07. > :16:11.decline in demand in many sectors of the economy and they can't sustain
:16:12. > :16:14.the same amount of growth. What is for you an acceptable level of
:16:15. > :16:20.privately held debt, individual and business held debt, in a sustainable
:16:21. > :16:27.economy - what level can it be? 60- 80% of GDP. 60% - 80%? Most
:16:28. > :16:32.countries are well over 100%. Exactly. They are not collapsing.
:16:33. > :16:37.You are Mr doom and gloom but things are not as bad around the world
:16:38. > :16:39.generally as you suggest. What has happened, and the reason they are
:16:40. > :16:44.not so bad is because country outside Europe are doing government
:16:45. > :16:47.spending despite running a surplus, and it is good they are doing our
:16:48. > :16:54.spending. What has happened is credit demand has collapsed. If you
:16:55. > :16:58.look at the rate of growth, that is running at 15% of GDP on average
:16:59. > :17:02.before the crisis in the US, now it is 3% on average. There has been a
:17:03. > :17:06.collapse in demand and that is why we have stagnation around the globe.
:17:07. > :17:09.We are all getting ourselves in that situation. Australia and China are
:17:10. > :17:14.approaching it now. Funnily enough your list of the countries we should
:17:15. > :17:17.expect the crisis to beginning, including China and Australia as
:17:18. > :17:22.number one and two, then other countries many would find
:17:23. > :17:25.surprising, sweet and you say, South Korea, Canada and perhaps most
:17:26. > :17:30.bizarre of all Norway. One of the richest countries in the world with
:17:31. > :17:34.a massive sovereign wealth fund and oil reserves and gas reserves to die
:17:35. > :17:41.for. I know. What I am going on is the level of debt they have
:17:42. > :17:44.accumulated, how faster debt is growing, and the trend in the credit
:17:45. > :17:48.which is negative in most countries. The interesting one is South Korea
:17:49. > :17:52.which I did not expect to see. South Korea has had a housing bubble. And
:17:53. > :17:55.the housing bubble has got it over the collapse Internet it is getting
:17:56. > :18:00.for its exports to China right now. How long until this catastrophe
:18:01. > :18:04.strikes? It won't be a catastrophe on the scale of the American one,
:18:05. > :18:09.because it is more diversified. If some of the seven went at the same
:18:10. > :18:13.time... We are talking about countries which are equivalent of
:18:14. > :18:17.about one third of the global GDP. They won't all go at the same time
:18:18. > :18:21.but if they did it would be of the scale of the American downturn in
:18:22. > :18:25.2008. Is that a possibility or are you enjoying the popularity of
:18:26. > :18:29.saying this? I think it is a possibility and I put my neck out on
:18:30. > :18:34.this, the book is coming out next year, so if I am wrong... Another
:18:35. > :18:39.walk, you go up another mountain? I am going to do an English one, they
:18:40. > :18:43.are as low as they go. Before we end, your prescription for what
:18:44. > :18:47.works. You say quantitive easing... If we generalise, around the world,
:18:48. > :18:51.central banks have essentially used quantitative easing to try and
:18:52. > :18:54.stimulate their economies. You say that doesn't work, it doesn't
:18:55. > :18:59.trickle down and filter through to real people making real spending
:19:00. > :19:04.decisions. So what does work? People's quantitative easing, like
:19:05. > :19:07.with Positive Money in England, rather than buying bonds from the
:19:08. > :19:09.banks, which puts money in their reserve account that the central
:19:10. > :19:14.bank, purchase debt or however you get hold of it... You have talked
:19:15. > :19:17.about writing off debt. You say governments should go to his people
:19:18. > :19:21.have spent too much money buying new TVs and whatever else and you say,
:19:22. > :19:26.give them a pass and write off their debt? I am saying it goes to people
:19:27. > :19:29.whether or not they are in doubt, because if you do people who go into
:19:30. > :19:33.debt you are rewarding moral hazard, which is a good point. Imagine what
:19:34. > :19:37.Wolfgang Schauble would say to you when you say to him, you know what,
:19:38. > :19:40.we are going to give... Wolfgang Schauble doesn't understand money,
:19:41. > :19:44.and mainstream economists in particular are still coming to grips
:19:45. > :19:48.with... How do you say that to the man who has overseen the most
:19:49. > :19:51.successful period in the German economy... (CROSSTALK). The euro has
:19:52. > :19:56.given them a 90 cents trade surplus. They are caught are rising southern
:19:57. > :20:03.Europe. -- 90%. Fewer litres and parasites, you mean? Their surface
:20:04. > :20:09.went from 0% to 90 cents during the time of the euro, so without that
:20:10. > :20:14.they would be in a different situation -- 9% you can't duplicate
:20:15. > :20:18.it. OK, well, not everybody can. People have got to buy as well as
:20:19. > :20:21.sell. That is why the balance for trade is zero. So you are saying we
:20:22. > :20:25.don't write off people's private debt but we give money to everybody.
:20:26. > :20:29.Is that what we call helicopter money? People in debt would have to
:20:30. > :20:33.use it to pay down their debt and those not... You would force them?
:20:34. > :20:36.You would go through bank accounts and put it into somebody's bank
:20:37. > :20:44.account. If there is debt, it cancels the debt, and if there is
:20:45. > :20:47.debt, it cancels. Balancing this, to stop the large increase in money
:20:48. > :20:52.supply are occurring, you use that to boost domestic activity and
:20:53. > :20:55.reduce debt. I am sorry, forgive me for sounding puzzled, but this works
:20:56. > :20:59.for governments which are running massive public deficits and indeed
:21:00. > :21:05.massive national debt as well? (CROSSTALK). Government still give
:21:06. > :21:09.out money to everybody. The danger is the trade deficit, the most
:21:10. > :21:13.important deficit to control. Government should run a deficit most
:21:14. > :21:15.of the time. The mistake we make is believing government should run a
:21:16. > :21:19.surplus or be balanced but governments have one of two ways of
:21:20. > :21:22.creating money and the banks are the other way. If the government doesn't
:21:23. > :21:27.create money we borrow from the banks and end up in the crisis we
:21:28. > :21:30.are in now. You would have to admit that at the moment this idea of
:21:31. > :21:34.helicopter money being the key to getting governments, well, not
:21:35. > :21:37.governments but nations out of slow growth, it is somewhat
:21:38. > :21:43.controversial. It would not be as successful if Milton Friedman didn't
:21:44. > :21:46.invent the phrase 40 years ago, so I have to thank him for that. What I
:21:47. > :21:50.am getting at now at the end of the interview is whether anyone should
:21:51. > :21:57.take anything any economist says seriously? Good question and in my
:21:58. > :22:01.book, Debunking Economic, if we all did that we would be in a better
:22:02. > :22:05.place. You are cheeky in that you slag off all other economists and
:22:06. > :22:09.say that the profession you are part of has been wrong for so long, that
:22:10. > :22:13.is why you are in anti- economist, but you're still an economist in the
:22:14. > :22:17.end. I am trying to get us to think in a modern complex systems wait,
:22:18. > :22:21.catch up on what's happening genuine science, adopting the world as a
:22:22. > :22:25.complex system, and thinking about things which are dynamic, out of
:22:26. > :22:32.equilibrium and god sakes take money out of economic theory, which we do
:22:33. > :22:35.not do. There is a serious problem about whether we can afford to
:22:36. > :22:39.listen to experts any more. Good point. During the Brexit debate,
:22:40. > :22:42.Michael Gove, senior Brexit politician from the Conservative
:22:43. > :22:46.Party said, you know what, we been listening to experts for too long.
:22:47. > :22:51.And in particular in economics, where, you know, it is nominally a
:22:52. > :22:55.science but it is so much predicated on human behaviour. It seems that
:22:56. > :22:59.forecasting the future is pretty much impossible. It is chicken
:23:00. > :23:06.entrails stuff. It is not presented that well. . I know when you hop on
:23:07. > :23:09.the plane you trust the engineers who know how to design something to
:23:10. > :23:15.take off and land safely and you don't even need to think about it
:23:16. > :23:22.because every time it works. Engineers are experts. Scientists
:23:23. > :23:24.are experts, climate scientists are experts, economists unfortunately
:23:25. > :23:29.without having the mantle have earned it. Whether they write a good
:23:30. > :23:37.or bad theory there is a momentum to the economy. They have led us into a
:23:38. > :23:40.bad alley which have led us into a bad decade. We need to reform
:23:41. > :23:45.economics first. We can agree on that. And then look at how to reform
:23:46. > :23:47.it and then it comes to the question of modelling the macroeconomy.
:23:48. > :23:51.Economics can learn from other sciences that has been neglecting in
:23:52. > :23:53.particular what I have called complex systems analysis which has
:23:54. > :23:59.grown up in the last 40 years since a guy called Lorenz built the first
:24:00. > :24:02.non- equilibrium complex model of the weather which we know what on
:24:03. > :24:08.grand detail on TV every night for the weather report. -- now watch. It
:24:09. > :24:12.has improved dramatically over the last five decades. Economics has
:24:13. > :24:15.ignore what happened. They should borrow and apply that in the
:24:16. > :24:18.structures of the economy. Interesting thought to end on. Steve
:24:19. > :24:35.Keen, thank you very much for being on HARDtalk.