"ECONOMICS IS NOT A SCIENCE, IT'S A RELIGION" | Steve Keen

Overview

Steve Keen argues that mainstream economics functions more like a belief system (“religion”) than a science because its core assumptions are ideological and repeatedly contradicted by logic and real-world evidence.

Core Claims

• Economics embeds ideology from the start: Keen claims the discipline shifted away from understanding how human societies develop (as far back as Adam Smith) and toward an ideological contest over how wealth is produced and who deserves it.

• Neoclassical economics is built on a “perfect market” worldview: Keen argues that neoclassical theory presents supply and demand (abstracted from government, concentrated power, and unions) as keeping markets near equilibrium. Income, in this view, is distributed “meritocratically” via marginal products of labor and capital. Keen says this framework is used to strongly justify capitalism despite being “completely wrong.”

• Mathematical models fail to deliver equilibrium as claimed: Keen critiques neoclassical reliance on mathematical formulations—like diminishing marginal utility and equilibrium via supply and demand. He argues that key attempts to justify equilibrium (including general equilibrium models using something like a “Walrasian auctioneer”) depend on convergence results that later proved not to hold due to a “non-convergence” issue (linked to Jevons stability / stability problems in the mathematics).

• Economists respond by avoiding implications rather than revising theory: Instead of treating failures as evidence that the economy is often out of equilibrium (which could help explain dynamics such as creativity and capitalist change), Keen argues economists treated the mathematical failure as a minor inconvenience. He suggests they fudged or ignored the result. He also points to problems deriving demand curves from individual demand curves (referred to as a “Sonn-shine Mantra” / theorem in the subtitles).

• Empirical contradictions are dismissed or papered over: As an example, Keen cites Alan Blinder (noted in the subtitles as a former U.S. Fed Vice Chair / AEA president), who surveyed firm pricing and cost structures and found that around 90% of firms do not have rising marginal costs, contradicting standard textbook assumptions. Keen claims Blinder later updated his textbook but did not acknowledge his own research, and economists continued teaching the incorrect model—supporting Keen’s broader argument that the discipline resists evidence.

Presenters or Contributors

• Steve Keen