Sunday, December 27, 2015

Steve Keen on Why the Euro is Destroying Europe

Steve Keen speaks below on the catastrophe that is the Eurozone, and this is lecture 7 that is part of Keen’s course at Kingston University in the UK.


  1. I decided to look up the source article for the Milton Friedman comments.

    Here it is!

    It is really good!

    "View/Create comment on this paragraphThe drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues. Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity."

    1. Yes, Milton Friedman deserves credit for seeing this.

      To a lesser extent, so did Thatcher, who (correctly) saw the emerging EU as a threat to British political and economic independence.

      The left-wing Tony Benn was also a harsh critic of the EU on similar grounds. Although left-wing people hate to say or admit it, the current British UKIP has a much better understanding of the threat posed to democracy and economic independence by the EU.

    2. It is a threat to democracy. We see this constantly. Plebiscites overridden, the outrage in Portugal. This is why some like it so much I think.

      The argument for the EU has always struck me as weak. Free trade is a good thing, but beyond that you have to deal with many more issues. Trying to pretend everything is economics, because the market is everything, always fail.
      "Freedom costs" are never ever represented in libertarian arguments about open borders for example.

  2. I think the idea that you can not have a monetary unión without a fiscal unión - it is not really a left, right, or center issue.

    From Friedman to Krugman, they all point this out! Even my college macroeconomics professors back in India said no less!

  3. Thanks for referring me to Keen's characteristically lucid and intelligible lecture.

    As a German victim of the EU regime, may I just add one more aspect concerning the "Fehlkonstruktion"(faulty design) that the EU is: the prevention of wars between the members of the EU is said to be the original and most basic reason for introducing the EU.

    What need is there to pacify the pacified (by dint of a "Fehlkonstruktion" that is bound to reintroduce powerful animosities between the affected countries)?

    My generation(born after the war)is being told that we would inevitably engage in wars against our neighbours unless we subjected ourselves to the (democracy numbing) EU bureaucracy.

    What an insult! After the second world war there was never a situation, atmosphere or propensity among the peoples and powers-that-be (of the later EU-members) to engage in warfare amongst each other.

    Turning my attention to something more uplifting: I intend to refresh and improve my knowledge of macroeconomics.

    What is the best book to consult?

    I insist on faithful treatment of the basics and the elementary, most of all, but would also be happy to follow the exposition into more advanced levels.

    Thanks for help.

  4. Good post. When people tell me the EU stopped another war in Europe I agree and note that Australia is still at war with Japan.

    You should read the General Theory, for the reasons Aaron Swartz gave here: