How Economists Drive Civilization off a Cliff | Steve Keen

Economic Systems and Global Survival: An Analysis of the Theories of Professor Steve KeenExecutive SummaryThis briefing document synthesizes the core arguments of Professor Steve Keen, a critic of mainstream economics and author of Debunking Economics. Keen argues that neoclassical economics is a fundamentally flawed discipline that ignores the physical laws of the universe, specifically thermodynamics and the necessity of energy. By omitting banks, debt, and money from macroeconomic models, and by trivializing the existential threat of climate change, mainstream economists are purportedly leading humanity toward self-destruction.Critical Takeaways:• Energy as the Foundation: Production is impossible without energy. Mainstream models that rely solely on Labor and Capital are physically impossible "sculptures" or "corpses."• Economic Misinformation on Climate: Economic models used by the IPCC and Nobel laureates like William Nordhaus drastically underestimate climate damage, predicting minor GDP fluctuations for temperature rises that scientists believe will collapse civilization.• Monetary Realities: Banks create money through debt, not as intermediaries for savers. Similarly, government deficits are essential for creating private sector net worth and fiat money.• The Eurozone Crisis: The Maastricht Treaty’s constraints on debt and the lack of exchange rate flexibility represent an "ideological mistake" that hinders European innovation and economic stability.• Existential Risk: There is a predicted 90–95% chance that functioning civilization will not survive to 2050 without a "World War style" pivot toward energy rationing, food buffers, and rapid nuclear/solar expansion.