Swartz and Keen

Over at Crooked Timber, I and others have been blogging about the death of the wonderful Aaron Swartz, driven to suicide by abusive prosecutors Carmen M. Ortiz and Stephen Heymann (there are petitions calling for their dismissal, which US readers are encouraged to sign, and another to pardon Swartz. Opinions differ on the last of these, but I think it should be supported).

Now we have a similar, though hopefully less tragic, case of the same mentality being applied in Australia. Last year, the University of Western Sydney tried to shut down its economics program. I was among the many who protested and the university backed down partially, agreeing to retain a major. But lots of people, including well-known macroeconomist Steve Keen decided to take the redundancy package and leave. Keen’s course was to be scrapped, and he commented to students that, in the absence of any way of retaking the course, he wouldn’t be able to fail them. Whether this was a joke, or a serious statement, it certainly pointed out the incompetence with which the shutdown was being managed. The University, possibly still smarting from its defeat, took disciplinary action against Keen and has now taken the extraordinary step of referring him to the Independent Commission Against Corruption. I’m sure that ICAC will laugh at this, but it’s the kind of threat that has to be taken seriously. I imagine Keen will face significant legal expenses as a result.

So far, I’ve referred to the University, but obviously these decisions were made by actual people, and those at the centre appear to be:

Kerri-Lee Krause, pro vice-chancellor (education) (quoted in the Oz story)
Clive Smallman, Dean of Business

The vice-chancellor of UWS, Janice Reid hasn’t made any public statement as yet, AFAIK. If she has any care for the reputation of UWS, and her own, she needs to abandon this vindictive attempt at prosecution, and pull these bullying bureaucrats into line.

More at Catallaxy – on this occasion, I agree entirely.

Note – if you follow the Catallaxy link, do yourself a favor and skip the comments thread. Australia’s centre-right intelligentsia living up/down to its usual standard.

52 thoughts on “Swartz and Keen

  1. I’m surprised he wasn’t labelled a terrorist. There’s still time I guess. Also, whenever I hear the phrase “we take x very seriously” I know I hear a moron.

  2. That is quite bizarre. I am not understanding the logic.

    Mr. Swartz, I strongly suspect was prosecuted after JSTOR dropped charges in retaliation for his successful opposition to SOPA. Political pressure, perhaps something more.

  3. You may on this occasion agree with a post at Catallaxy, but I made the mistake of reading the comments. (Maybe I should have known, maybe you should warn people)

  4. I did not realize that Australian academia had sunk this low. This is utterly and totally ridiculous. These administrators deserve every sort of opprobrium that will rain down on their worthless heads, mate.

  5. They say a wounded bull is dangerous. However that danger is short lived. On the other hand frightened mediocrity in humans is persistent and vindictive. Fortunately the vendetta usually backfires. For example the prosecutor in Virginia USA tried to bully climatologist Michael Mann but eventually had to pull his head in. Recall also how vindictiveness a decade ago by a certain female magistrate in Brisbane cost her job and reputation. The instigators seem unaware this usually turns out to be an own goal.

  6. With universities hooking up with TAFEs, I wonder if there is a corrosion of standard economics going on, as not “vocational” enough for business degrees? Two of the TAFE subjects which are used to get a credit for first year univ eco are FNSINC601A “Apply economic principles to work in the financial services industry”, and FNSFLT502A “Facilitate customer awareness of Australian financial systems”. Not much room for Keen’s “economic debunking” there! But whatever you think of them, Keen’s perspectives are important ones, and it dumbs down the university to lose them.

    Keen has backed off from his comment about not failing anyone, so the university calling in ICAC rather than using their own disciplinary process is obviously intended as punitive, and sounds like a warning to other staff not to “damage the brand” of UWS. A tolerance of free speech is universally seen as essential to the concept of a university, so maybe they should drop the word university in the name in “truth in advertising.”

  7. Would Keen need a lawyer for ICAC? I would have thought that it was up to UWS to prove their case.

  8. “Bullying bureaucrats” sums it up well. University bureaucrats some of the worst in the country – they don’t care about Keen per se – they want vulnerable people whose jobs they are attacking to tow the line.

  9. I am sure more bitter jokes have been said by people who have been laid-off than Keen’s joke.

    a key part of layoffs is paying people enough so that they go quitely and do not tell tales about what it was really like at theor old employers. the truth might harm recruitment.

  10. One of the sad things about this country is that campaigns are being launched to stop workplace and school bullying while using the legal system to bully still seems to be OK.
    Perhaps UWA should be taken to Fair work Aus? Or is this just a paper tiger?

  11. What pisses me off is these “administrators” calling themselves “The University”.

  12. Universities are in the hands of Business Managers. The professions and the intellectual life in this country are in grave danger. Right at the time when the nation needs to be at the top of its game to face the coming challenges of climate change, resource depletion and the complete re-tooling of our economy for same, we have these blind ideological business idiots running everything. They are fifth column parasites catabolising the muscular remnants of the real economy.

  13. Perhaps someone who has close involvement in a university (because there are obviously different objectives amongst them) could comment on how the subject matter of what is being taught has changed: both the range of subjects and their content. In Economics, I’m guessing (but I don’t know) that there is a dumbing down to accommodate the “pathways” students from TAFE, and that the offer is reduced for heterodox economics, econ history. How the student cohort at TAFE fit into second year university economics I don’t know.

    Also, has it changed teaching methods or materials used? What I recall from the Gans-Mankiw/ McTaggart/Jackson intro texts is that the microeconomics has a fairly abstract and model-based framework centred on marginalist decisionmaking which doesn’t connect with many students (maybe this is a deliberate filtering process to see who’s committed up to it for second year studies.) I know this is a big subject but does someone on this blog have direct experience they can pass on?

    My overarching concern is whether the organisation of contemporary university economics education is more (or less?) likely to encourage and skill-up undergrads to think holistically and incorporate contemporary concerns including sustainability, to add new knowledge, and to draw on interdisciplinary knowledge in developing public policy, or …. is the wet blanket of received wisdom calling the shots.

  14. From comments i can conclude that this is how the state aparatus develop negative perception. It boils down to; state is to blame, reduce state so that business can thrive.
    Without what Ikonoclast wrote, you could imagine public mentality developing atitude of what Reagan and Thacher presented; fear the state as if state did this in a vacum for its own eveil purpose.

    What Ikonoclast point out is what is the problem. When states abandons its responsibility to progresivly develop change for the benfit of most population to corporate interests, this is what happens. Not that state is not to blame for abandoning the responsibility but that it is forgoten to whose benefit it did.

    It is that when state administration gives in to money power and abandons its responsibility that next in power takes over, corporations.

    State responsibility is to organize the whole society, economic and social, for progressive advance to better future and it is given this responsibility by democracy. Neoliberal claim is that state is bad at it and that capitalist should do it and they prove it by bribing state administrators not to do their job.

  15. I guess that this is a natural developement after the state runs out of usable free land and resources to give for almost free into private hands for private profits, witnessed in history of Americas and Australia. After free land, state gives monopoliesand enforces them by army and police, then gives technological developement trough government subsidized R&D, then gives power to create money to banks, then education or healthcare in US.

    State always gives something for free to private sector in order to protect profit and capitalism. I am not saying that this is bad or good, i just observe. It could be good thing since this is how it benefits private sector in total while public sector always have the benefit of fiat to retreat to. It is just a way democracy chose to take.

    But this is how deficit serve to flow from public sector to private sector. Private sector is all of us, everyone. State deficit means that state gave more then it took from private sector, so deficit is good for private sector/us.

    State surplus means that state is taking more then giving to private sector, hence surplus is bad for private sector/us.
    And state has unlimited resources to give.

  16. If a professor from here and one at Catallaxy are in agreement on anything then I suspect some sort of professional conspiracy. Perhaps you should all be referred to ICAC.

  17. It would be wonderful if universities could return to their central missions of teaching and scholarship. Unfortunately, here in the states, the administrators have decided to pay themselves extremely well for turning teaching over to adjuncts and gutting scholarship. Now they’re trying to “unbundle” courses and deliver as much as possible electronically. Next, I imagine, will come auctioning off the buildings and the grounds. So, in Australia, you ain’t seen nothin’ yet. Administrators are locusts. They’ll eat out the substance of everything, and then start eating each other.

  18. It is not clear whether Keen is getting kicked-out due to his beliefs (as John Burton got kicked-out of ANU), or whether he is getting shafted by the corporatisation of tertiary education.

    Anyway there is a general problem independent of what happens to crazy Keen.

    The ABC Radio National, is hot on this issue.

    Well worth downloading: http://www.abc.net.au/radionational/programs/bigideas/

  19. @Chris Warren
    Chris this may all be true, but there is also a specific problem relating to the teaching of economics. I suspect economics still vies with law (ugh!) as the preferred background for leaders in the public service, so how they emerge from economics faculties is important to all of us. As R O’Donnell wrote in 2004, any “list of proficiencies” for econ graduates which doesn’t incorporate knowledge of pluralism, controversies and alternative conceptual frameworks precludes important intellectual content and limits understanding of stakeholders: pretty important in government. http://www.uq.edu.au/economics/AJEE/docs/Volume%201,%20Number%201,%20%202004/6%20O%27Donnell%20-%20What%20kind%20of%20economics%20graduates%20do%20we%20want.pdf

    He doesn’t see this as an academic/vocational divide: a broad awareness of the strengths and weaknesses of economics is a necessary adjunct to technical and practical skills also.
    He contends that the “self interest model” of economics does not instil desirable meta-values in the leaders and policy makers which he lists as open-mindedness, breadth, humility, transparency, and awareness that economics is one among many disciplines.

    My one word summary for all this is “contextualisation”. Does anyone see any progress towards this over recent years?

  20. When blind ideology takes over a society the key indicator is denial of empirical reality. This denial most clearly manifests itself in the belief that unsustainable trends can continue indefinitely and in contradiction to the dependable natural laws discovered by the hard sciences. Thus, a society like ours which is controlled by a blind ideology will believe;

    (a) population growth can continue indefinitely;
    (b) economic growth can continue indefinitetly;
    (c) pollution growth can continue idefinitely without deleterious effect; and
    (c) the resources of the earth are infinite.

    Secondarily, we see that a blind ideology believes, at least implicitly, that a number of other processes can be continued indefinitely when the logic of limits indicates this is impossible. Thus we see our ruling ideology, despite hypocritical protestations to the contrary, in essence believes;

    (a) the shift of percentage share of national income from labour to capital can continue indefinitely;
    (b) the stripping of wages and conditions from workers can continue indefinitely;
    (c) the selling of government assets can continue indefinitely;
    (d) the dismantling of education can continue indefinitely; and
    (e) the rise in youth unemployment can continue indefinitely without compromising our future.

    It’s particularly concerning that the ruling ideology thinks a complex, scientific-industrial society facing an existential crisis (global warming, limits to growth) can be run and maintained whilst progressively debasing education, persecuting scientists and intellectuals in general and persecuting anyone with a different point of view.

    The enforcement of an ideological one-view-only monoculture at the precise moment in history when we need as much creative and exploratory thinking as possible, is redolent of a degenerate culture destined for eclipse or extinction.

    Late stage, mono-ideology, corporate capitalism is a degenerate, unsustainable culture and production system destined for eclipse or extinction along with all its adherents and dragooned masses.

    “We can’t solve problems by using the same kind of thinking we used when we created them.” – attributed to Albert Einstein.

  21. Mr MIT :
    Steve Keen’s reaearch is rubbish.

    On what basis do you make this claim? You need to outline your reasoning and the points you can make which refute Keen’s approach.

    It seems to me there is enough in Keen’s work which indicates it should be examined seriously and cannot be rejected peremptorily as “rubbish”. I wonder if you understand that;

    (a) whilst a complex thesis vigourously and accurately pursued may eventually be shown to be an incorrect thesis or theory;

    (b) this does not necessarily mean the theory and consequent research is “rubbish”.

    Such research can be useful in pointing out what is not the answer and can often lay extensive ground work for finding the correct answer(s).

    But then I suspect if Mr MIT had a cogent refutation of all of Steve Keen’s work he would have summarised it or linked to it.

  22. An afterthought.

    Is string theory “rubbish” in the sense Mr MIT uses the term? The answer is we don’t know yet. However, if it proves to be incorrect (in the Popperian sense of being refuted by empirical evidence) will this mean that all the maths and maths techniques utilised and indeed discovered/invented in the pursuit of string theory are “rubbish”? I would hazard a guess that something useful will come out of the project even if string theory is empirically refuted.

    Mr MIT, unless he has cogent proofs that Keen’s research is “rubbish” is making the mistake of assuming that we can know beforehand what will be fruitful lines of complex research and what will not be. We can’t know that. We must pursue the research and discover things as we go. The following of blind alleys is part of that process. Some unfortunate researchers might follow blind alleys all their lives and yet still be useful to the entire enterprise as they thus mark out clearly certain paths not to be taken.

  23. @Ikonoclast

    Keen follows Minsky, and blames speculative and hedging debt for the problems of capitalism. Not other forms of debt.

    His approach and level of academic discourse, and his scholarship, demonstrated in his chapter 13 (1st edition) of so-called “debunking” is appalling.

    There have always been critics of Keynesian economics but they always seem to flap about interminably – see Marc Linder – “Anti-Samuelson”.

    Keen does not provide a models and data in a useful form so that others can replicate his findings. This is the key to a professional academic approach.

    He is a good media performer and his criticism of the current capitalist death march with debt is highly valuable, but others are on the same track, which you can follow if you view the Max Keiser reports (RT.com].

    Keens articles on value, in Journal History of Economic Theory (on JSTOR) though dated now, are weak in terms of what they seek to achieve.

    His core concept is that capital must obtain a return, attractive to Eric Aarons, means that he is seeking a better capitalism.

    Society is awash with reformers, and I do not doubt their good intentions, and every now and then other pops their head up – Ann Pettifor – Tim Jackson – Jim Stanford etc etc.

    We went through all this is the 1970’s, but OECD capitalism was able to mesmerize entire societies and academics, with false standards and faux products from oppressed workers overseas, and by increasing per capita debt until a breaking point was reached.

    Keens ch 13 approach was repeated in his ch 17 in his 2nd edition. So wiht his love of capital – this is how he must be judged.

    If you want to debunk economics, be careful you are not debunked yourself.

  24. @Chris Warren

    Thank you for the comprehensive answer. I must admit I found Keen’s “Debunking Economics” unreadable.

    It has been a tenet of mine for some time now that the greatest authors are in fact readable and understandable no matter how complex, difficult and extensive their subject matter. I have found for example such disparate writers as Adam Smith, David Hume and Karl Marx along with Melville and Tolstoy (for literary examples) to be eminently readable and understandable. I have not read Keynes in the original.

    Thus if a writer loses me (outside of the complex mathematical part of the argument) I feel on pretty solid ground judging that the writer has no really cogent ideas or is incapable of orgaonsijng them and getting them across effectively to an intelligent lay reader. Either way, he is not worth reading from an autodidact point of view. Keen’s book fell into this category for me.

    His blog is more understandable. You are correct that he views entrepreneurial and industrial capitalism as “valid and useful” (my awkward phrase). His criticism is reserved for speculation, speculative capital and excessive debt creation for those purposes. I suppose I view work that will assist in stabilising and moderating the operations of capital as worthwhile and useful in the interim. This would apply to the operations of social democracy and worker’s rights within mixed economy capitalism.

    However, given that the social democratic attempt to reform capitalism, circa 1850? to 1970?, has failed to the neocon capitalist reaction of 1970 to the present and continuing, then my hopes, of seeing capitalism progressively and peacefully reformed from within and tranisitioned to a cooperative worker owned and managed system, are ill-founded. I have made a mistake in thinking capitalism can be progressively and peacefully reformed. There is of course no way now that the capitalist oligarchs and their suborned governments and military-industrial complexes will ever allow a peaceful transition from this system. They will enforce it until the end.

    The end seems most likely to me to come in the form of mass dearth (mass food shortages etc.) as the endless growth system fails to deliver as it hits the limits to growth. The fury of the populace upon learning that the consumerist utopia and cornucopia were a lie will be indescribable and not particularly well directed if political and empirical consciousness remains low concerning the reasons why the disaster is unfolding. On the other hand, the repressive police and military apparatus of the capitalists will be ruthlessly used to the hilt to enforce their system to the bitter end. I see no real hope for any good resolution at all. Nevertheless, one cannot give up as that makes disaster a total self-fulfilling prophecy.

    Maybe its time for me to have done with “leftist” economists who will criticise the excrement of the sacred cow but not the sacred cow (capitalism) itself.

  25. I heard Steve Keen on ABC on Friday afternoon (can’t find any link).

    From memory, he said something along the lines of: “Given that if any students failed there would be no course for them to repeat, I felt it wouldn’t be conscionable to fail anyone. I shouldn’t have expressed it so bluntly.”

    Or something like that.

    If I was a student in that class I’d be asking: Who dobbed him in?

  26. I’ve disemvowelled Mr MIT, who’s previously been banned for trolling, sockpuppeteering and other breaches of the comment policy. Of course, he’s not from MIT (I won’t name his actual institution, on the off chance that he’s a better spoofer than I think).

    Please no more responses to this troll

  27. As much as I think that Keen is either borderline incompetent or fraudulent as an economist, I do not think he deserves this treatment from the administration.

    As an Australian who is currently overseas this, and other stories over the last 12-18 months, reduce the chances that I will ever return home to work at an Australian university.

  28. That seems a pretty baseless comment from someone with nothing to say.

    Just how is Keen fraudulent or incompetent Evan?

  29. As one of Steve Keen’s colleagues, I think it is fair to say that his comment to his UWS students was moot from the moment it left his lips because:

    (1) It is well-known (at UWS) that Steve would never pass a student who in fact failed horrendously. Thus his comment was in all likelihood one of his, not entirely uncommon, ‘off the cuff’ or ‘shoot from the hip’ remarks.

    (2) For the most part, economics students who survive to third year are sufficiently motivated and well-equipped to, under their own steam, avoid failure anyway.

    As for UWS management referring Steve to the Independent Commission Against Corruption, that move has now been withdrawn.

    As for the ‘plurality’ of views and specialisations in economics at UWS, there is no doubt that it has taken a very large hit for no other reason than a fair number of senior academic economists of ‘orthodox’ and ‘heterodox’ persuasions working in diverse fields will be leaving.

  30. sdfc: mostly, my comment is based Keen’s Physica A paper (Keen, Steve & Standish, Russell, 2006. “Profit maximization, industry structure, and competition: A critique of neoclassical theory,”) which could only have been published by someone with a great many misunderstandings of economics. Worse, after having the errors patiently explained he continues to publish the same material (http://www.paecon.net/PAEReview/issue53/KeenStandish53.pdf). Furthermore, Keen claims an “original contribution” for something which is not original. The “strategic reaction” coefficient Keen claims originality for on pg 75 is what economists call a “conjectural variations” coefficient, a concept which fell out of favour in the 1980s.

    For various discussions on what Keen got wrong, see http://www.sciencedirect.com/science/article/pii/S0378437107008874

  31. Good news!

    Now let’s look more closely at the actions of Kerri-Lee Krause, pro vice-chancellor (education)
    and Clive Smallman, Dean of Business – for instance, do they keep their KPI bonuses for intimidation?

  32. @Evan

    The subject is properly Political Economy not economics. Mathematical microeconomics models will always and only be artificial and highly simplistic models (compared to reality). The ever-changing complexities of class relations and institutional arrangements introduce too much distortion and noise for abstract microeconomic modelling to be successful. The entire field (microeconomics) is bunkum. That’s pretty much what Steve Keen is saying in his blog. Albeit, as I said above, I found his book unreadable.

    It’s interesting that virtually all the orthodox neoclassical economists failed to predict the Great Recession or Global Financial Crisis of 2007-2008. Several heterodox thinkers did predict it including Steve Keen.

    The thinkers who did predict it were paying attention to macroeconomic factors and the operations of the financial system. These thinkers were and are correct in pointing out that factors like government stimulus (or its opposite of “austerity”), the credit impulse (expanding indebtedness followed by deleveraging) and the wages share of the economy have an effect on aggregate demand and (short of exogenous shocks including resource shocks) are the prime factors affecting aggregate demand.

    The theory (Keynesian in origin) is coherent, elegant and supported by empirical outcomes. Neoclassical microeconomics is incoherent, inelegant and bears no relation to the empirical realities of our current political economy (oligarchic, corporate capitalism)*.

    As a self-referencing system with simplistic and artificial assumptions, neoclassical microeconomics is a mathematical game disconnected from the real world. It makes no difference whether the maths are correct or not.

  33. If ICAC has the power to investigate Keen over this, then ICAC has too much power.

    Surely there’s a mayor somewhere in NSW taking backhanders from developers that would be more worthy of their attention.

  34. This arises from the absurd anachronism that universities are, legally, instrumentalities of state governments. I believe that UWS managers have backed down on this aspect of the attack on Keen, unsurprisingly given the universal derision they have attracted.

  35. john, what is your preferred ownership/governance arrangements for the currently public owned universities?

    A non-profit status is usually supported on the grounds that this eases contracting over the quality of education where quality is hard to define, to measure and to enforce. There is less incentive to dilute quality if dividends are not possible.

    The flaw with this hypothesis is for-profit higher education blossomed in the Philippines until the Marcos regime turned against them in the 1980s.

    these for-profits educated ¾ of higher education students. Many of the for-profit colleges traded on the Manila Stock Exchange! The Philippines has a good reputation as an exporter of highly educated labour.

    HT :http://www.gmu.edu/centers/publicchoice/faculty%20pages/Tyler/Cowen-Papenfuss-revisedagain.pdf who found that for-profit education is prominent where instructional content is well-defined, high quality research is of little complementary value, students use education for learning rather than certification, and there are independent means of certifying quality, such as vocational tests.

  36. @John Quiggin

    It’s just as well for the academics who, back in the day, traded sex for high grades were not subject to ICAC scrutiny. (Wouldn’t happen today of course.)

    Now, that was corruption.

  37. @Evan

    Arguing over mathematical formula (which is what Keen does too) is not helpful.

    Keen has useful points, and no academic is totally correct – each probes an area in their own way. The more we get the silly Evan’s et al approaches, the less the real issues are ventilated and resolved.

    If the mathematical formula-approach was relevant we’d all be rich and happy by now.

    Any way, you cannot right a sensible mathematical formula for capitalism. I suppose you can for feudalism, slavery and socialism, but humans are not like this. Humans capture wealth through politics.

  38. Apropos corporatist managers at unis, Mr Angelo Kourtis, Pro-Vice-Chancellor Students at UWS, was interviewed by the ABC (linked to in JQ’s post). Mr Kourtis said words to the effect that economics will be offered within the broader context of a Business and Commerce degree.
    I would say, Mr Kourtis has it back to front (set inclusion problem) because ‘business’ and ‘commerce’ are but a part of the subject matter of Economics. Are there economista out there who disagrees with me and, if so, why?

    Steve Keen was guest lecturer (1 hr) in an Economics subject in a Management School. His contribution was highly valued by the students. I would be happy to send the evidence to our host, Prof Quiggin. This was at a time when role reversal of academic and clerical staff within universities was not prevalent.


  39. @Paul Foord
    Same here – though however unpleasant the experience it was useful as a reminder of why I don’t bother reading Catallaxy these days

  40. @hc
    Yep, Australian universities have the most incompetent bureaucracies I’ve ever experienced – believe me, they make the public service look a model of efficiency and customer focus.

    I disagree with lots of things Andrew Norton writes but I figure he’s probably right in saying that to explain behaviour you have to look to incentives and the incentives the current university system sets are not ones for good administration.

  41. @derrida derider

    True enough, but the general tendency of reform has been in the direction favored by Norton, and the bureaucracies have got worse. Not they were any more competent in the old days, but they didn’t throw their weight around nearly as much – that’s a direct consequence of the managerialist incentive structures promoted by successive reforming ministers, notably including Kemp.

  42. To put a scale on things while we are criticising here, coming away from my daughters graduation we were wondering how many students there are at Melbourne University. Staff 6000, students 40,000 . That is a huge number and an administrative nightmare, especially considering the degree of interaction between “management” and “patrons”. That does not excuse stupidity but global criticism of Universtiy Management I would imagine is to some degree the expected student reationary ethos rather than absolute reality. Just saying.

  43. I have often thought that university managers who want to “run the university like a business” fall between two stools. If they had any idea about running private businesses successfully they’d be doing that, whilst if they had any idea about how to run universities they wouldn’t see the private profit-driven corporation as a model to be emulated.

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