{"id":89092,"date":"2026-01-11T09:01:27","date_gmt":"2026-01-11T09:01:27","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=89092"},"modified":"2026-01-11T09:01:27","modified_gmt":"2026-01-11T09:01:27","slug":"keens-law","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/01\/11\/keens-law\/","title":{"rendered":"Keen’s Law"},"content":{"rendered":"

Steve Keen wrote this on Substack<\/a> yesterday:<\/p>\n

YouTube popped a video into my feed of Niall Ferguson (the author of\u00a0The Ascent of Money: a financial history of the world<\/a>) being interviewed on the\u00a0TRIGGERnometry<\/a>\u00a0show. He was asked the inevitable question about governments \u201cliving beyond their means\u201d, and gave the standard answer that governments which spent more than they collected in taxation are on the road to ruin.<\/p>\n

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This argument is wrong, but it\u2019s believed by people who, in another guise, are experts on money. Ferguson is an expert on the history of money; I prefer the work of Graeber, Martin and Gleeson-White, but his work on this front is scholarly. And yet he is entirely wrong about government finances, as were his interlocutors on the show, because they are all ignorant of the double-entry bookkeeping by which money is created.<\/p>\n

Ferguson quipped that he had invented \u201cFerguson\u2019s Law\u201d recently: \u201cany great power that spends more on interest payments than on defence won\u2019t be great for much longer\u201d. That led me to invent \u201cKeen\u2019s Law\u201d: that \u201cvirtually everyone who claims to be an expert on money doesn\u2019t understand double-entry bookkeeping\u201d. The only exceptions\u2014and I\u2019m only being partially tongue-in-cheek here\u2014are myself and\u00a0Richard Murphy<\/a>.<\/p><\/blockquote>\n

I was amused.<\/p>\n

But Steve is also right: unless you get double-entry, you cannot understand money or the economy. It really is that straightforward.<\/p>\n

The rest of Steve's Substack explores the double entry that shows Ferguson is wrong. Some will find it hard work, I admit. It is worth the effort.<\/p>\n

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Comments\u00a0<\/b><\/p>\n

When commenting, please take note of this blog\u2019s comment policy,\u00a0which is available here<\/a>. Contravening this policy will result in comments being deleted before or after initial publication at the editor\u2019s sole discretion and without explanation being required or offered.<\/p>\n","protected":false},"excerpt":{"rendered":"

Steve Keen wrote this on Substack yesterday: YouTube popped a video into my feed of Niall Ferguson (the author of\u00a0The Ascent of Money: a financial
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,35,174],"tags":[],"class_list":["post-89092","post","type-post","status-publish","format-standard","hentry","category-accounting","category-economics","category-modern-monetary-theory"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=89092"}],"version-history":[{"count":1,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89092\/revisions"}],"predecessor-version":[{"id":89093,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89092\/revisions\/89093"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=89092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=89092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=89092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}