May 31, 2010

Keynes Had Reconsidered the Invisible Hand

Monique Chartier

Monty Perelin at American Thinker observes

Wait, stop the Economics. There has been a terrible mistake.

From the timeline of the "Maynard Keynes" website. [H/T Jill Fallon at Estate Vaults.]

Over lunch at the Bank of England [in April, 1946], Keynes tells Henry Clay of his hopes that Adams Smith's "invisible hand" can help Britain out of the economic hole it is in:

"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."

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Keynes's General Theory has been revised numerous times since it was originally published, a couple of times by Keynes and then by other economists. Some of the original paper was just indisputably wrong, other parts more debatable.

It's all irrelevant to progressives, since none of them actually understand Keynesianism or have read his General Theory. They just latch onto it from their first indoctrination center, I mean public high school economics class which taught it to them as gospel. Did they learn about Hayek and business cycle theory? No. Friedman and monetarist theory? Probably not. Keynesianism is about as convenient an excuse for expansion of the public sector as one can find, especially when one doesn't actually understand the mechanics of how it is supposed to work. They'd probably spin in circles if you even asked them to explain the aggregate demand curve.

Posted by: Dan at May 31, 2010 11:20 AM

When considering Keynes, it is wise to keep in mind his most probative statement "In the long run, we are all dead".

Posted by: Warrington Faust at May 31, 2010 2:16 PM

There are those of us who believe that slashing spending when we’re still suffering from high unemployment is a counterproductive move that deepens the slump and depresses revenue, since what the government saves by spending cuts it loses in tax receipts. The “brave” conservative members of the House scaled back a bill extending aid to the long-term unemployed — after all, their friends are working; and the Senate left town without acting on the bill.

Once again the Republicans are pitiless and the Democrats are spineless.

Posted by: OldTimeLefty at May 31, 2010 9:14 PM
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