Episode supported by​ ​The Retort​

Steve Keen Warns The Iran War Will Crash the World's Economy and Trigger WW3

One of the world’s top economists reveals how multiple imminent crises will force us to scrap current economic models built on speculation and austerity.

I had the pleasure of meeting Professor Steve Keen, a prominent Australian post-Keynesian economist, author, and academic, who was one of the few economists to accurately predict and warn of the 2008 Global Financial Crisis years before it happened.

If you have been following my work and this podcast, you would know that I have been calling out the AI bubble years before people even knew what AI was, and that my retorts were not only targeting the overinflated Hollywood-level nonsense peddled by techbros.

I have also targeted what I describe as the “Ethics bros” who equally overinflated doom and gloom narratives about AI and Hollywood-level dystopian nonsense.

Hence, in this conversation with Professor Steve, I’m shocked that we live in a world where the warnings from Steve, based on actual evidence and real data, are anything but hype, and, above all, are not being discussed by the two aforementioned clickbait camps.

I dug into why the current AI boom is not just a story about overhyped chatbots, but also a tangled-up mess of bad economics, libertarian ideology, energy constraints, and environmental abuse all at once. Not to mention the cherry on top in the form of the Iran War and the consequential crises we are yet to face in the coming weeks, months and years!

What stood out to me is that the systems powering the global economy as we know it (i.e., finance, infrastructure, politics, and energy) can barely handle the scale of the bet being made in the current libertarian bubble that has run out of ideas.

Steve’s view throughout the discussion was blunt: Forget the bubble. We are at the cusp of a wider collapse waiting to happen. Not in the faraway future, but in 2026!

Steve also explains why mainstream economics consistently misses the real risks, as it overlooks how banks create money, how debt fuels bubbles, and how fragile our public systems truly are. And this is not for the first time.

Join the conversation now to learn about basic economics without the jargon, why we have all been fooled by theoretical economists responsible for the repeated economic failures adopted by governments, and the models we need to push that focus on urgently protecting people, stabilising essentials, and taking energy and climate seriously before the system breaks.

• ​00:00:00 – Preview
• ​00:01:53 – The global economic outlook: AI bubble risks, climate pressures and the Iran war. Can the system hold together through 2026?
• ​00:07:09 – Historical parallels between the railway bubble and today’s AI hype, and how speculative excess can destabilise financial markets
• ​00:14:14 – How conventional economic theories contributed to today’s energy, environmental and innovation challenges
• ​00:20:18 – What did China get right? Why its economic direction appears increasingly different from the West
• ​00:23:20 – How the Iran war exposed the vulnerabilities of global fossil-fuel dependence and strengthened the case for energy independence
• ​00:25:35 – How conservative politics and conventional economic thinking contributed to decades of inaction on climate change
• ​00:30:05 – Why academic economics has remained disconnected from economic reality for more than 150 years
• ​00:37:08 – The risks of zero-government, anti-regulation and anti-democratic libertarian ideology promoted by influential technology leaders and billionaires
• ​00:43:38 – Why governments continue to follow conventional economic models despite repeated evidence of their failures
• ​00:49:39 – Why so many people fail to recognise economic realities that could directly affect their livelihoods
• ​00:56:52 – AD: The Retort’s campaign to support independent journalism and how you can help at RetortMedia.com/Support
• ​00:58:10 – Could disruption in the Strait of Hormuz and Bab al-Mandab become triggers for a wider global economic crisis?
• ​01:01:38 – What could the world look like after an AI bubble collapse and the wider economic disruption that follows?
• ​01:08:54 – The political responses Steve received following his campaigns for a fundamental change in economic direction
• ​01:11:16 – Why economic theory can resemble a belief system rather than a science, and what could finally challenge that orthodoxy
• ​01:25:09 – Do libertarian economists genuinely believe their theories, or are financial and political incentives helping sustain them?
• ​01:25:09 – After a major economic crisis, how do we rebuild and recover?