Economia
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John Maynard Keynes’s main claim to fame is his advocacy of deficit spending as a tool of economic recovery. In a depressed economy, the argument runs, the government should spend money it doesn’t have.
That will stimulate demand, which in term will stimulate supply. Once the economy is back on track, tax revenues will increase, which the government can use to offset its deficits. Thus, in the medium term its books will happily balance.
Before Keynes some economists had urged the occasional use of deficit spending to counter downturns. Keynes’s originality was placing that particular political policy tool within the context of a more general economic theory.
But since Keynes’s 1936 General Theory, we’ve experienced decades of deficits and accelerating government debt. So what went wrong?
I’ve been rereading James Buchanan and Richard Wagner’s seminal Democracy in Deficit: The Political Legacy of Lord Keynes. Buchanan won the Nobel Prize in 1986 for pioneering Public Choice theory or “politics without romance,” as he called it.
Democracy in Deficit is essential reading for all political thinkers, and two of its points about assessing Keynes’s responsibility strike me as important.
So perhaps Keynes thought his prescriptions should not be applied in a democracy. Only an aristocracy of intelligent and disciplined politicians could be trusted with Keynesian policies.
After all, what kind of politician typically gets democratically elected? Don’t they tend to be more cunning than intelligent, more pandering and less disciplined? So Keynesianism in a democratic context will lead to misdirected and out-of-control spending — and here we are today. But we can’t blame aristocratic Keynes for democratic Keynesianism, so we must shift the blame to his followers who abused his system and misapplied it.
Second, Keynes’s General Theory was published in 1936 and was in part responsive to the Great Depression. Emergency government measures were needed, the argument ran. But those emergency measures would and should be suspended once the emergency had passed. So a decade later — after the Depression and World War II — Keynes’s theory says to stop the deficit spending. But Keynes died in 1946, and if his disciples continued to apply his methods that is not Keynes’s fault.
So is Lord Keynes off the hook?
Mais
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Economia
Keynes foi um keynesiano?
Was Keynes a Keynesian?
Send to KindleBy Stephen Hicks
December 29, 2015
1
John Maynard Keynes’s main claim to fame is his advocacy of deficit spending as a tool of economic recovery. In a depressed economy, the argument runs, the government should spend money it doesn’t have.
In our era of Keynesian economics on steroids, we should ask: How close is current Keynesian practice to original Keynesian theory?John Maynard Keynes’s main claim to fame is his advocacy of deficit spending as a tool of economic recovery. In a depressed economy, the argument runs, the government should spend money it doesn’t have.
That will stimulate demand, which in term will stimulate supply. Once the economy is back on track, tax revenues will increase, which the government can use to offset its deficits. Thus, in the medium term its books will happily balance.
Before Keynes some economists had urged the occasional use of deficit spending to counter downturns. Keynes’s originality was placing that particular political policy tool within the context of a more general economic theory.
But since Keynes’s 1936 General Theory, we’ve experienced decades of deficits and accelerating government debt. So what went wrong?
I’ve been rereading James Buchanan and Richard Wagner’s seminal Democracy in Deficit: The Political Legacy of Lord Keynes. Buchanan won the Nobel Prize in 1986 for pioneering Public Choice theory or “politics without romance,” as he called it.
Democracy in Deficit is essential reading for all political thinkers, and two of its points about assessing Keynes’s responsibility strike me as important.
Keynes was a political elitist, not a democrat. Buchanan and Wagner quote biographer R. F. Harrod on Keynes’s ongoing assumption “that the government of Britain was and could continue to be in the hands of an intellectual aristocracy using the methods of persuasion.”
First, Keynes was a political elitist, not a democrat. Buchanan and Wagner quote biographer R. F. Harrod on Keynes’s ongoing assumption “that the government of Britain was and could continue to be in the hands of an intellectual aristocracy using the methods of persuasion.”So perhaps Keynes thought his prescriptions should not be applied in a democracy. Only an aristocracy of intelligent and disciplined politicians could be trusted with Keynesian policies.
After all, what kind of politician typically gets democratically elected? Don’t they tend to be more cunning than intelligent, more pandering and less disciplined? So Keynesianism in a democratic context will lead to misdirected and out-of-control spending — and here we are today. But we can’t blame aristocratic Keynes for democratic Keynesianism, so we must shift the blame to his followers who abused his system and misapplied it.
Second, Keynes’s General Theory was published in 1936 and was in part responsive to the Great Depression. Emergency government measures were needed, the argument ran. But those emergency measures would and should be suspended once the emergency had passed. So a decade later — after the Depression and World War II — Keynes’s theory says to stop the deficit spending. But Keynes died in 1946, and if his disciples continued to apply his methods that is not Keynes’s fault.
So is Lord Keynes off the hook?
Mais
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- Teoria Keynesiana
Hayek on Keynes: The decisive assumption on which Keynes’s original argument rested and which has since ruled policy is that it is impossible ever to reduce the money wages of a substantial group of workers without causing extensive unemployment....
- Debate Macroeconômico - Keynes Contra Hayek
Keynes vs. Hayek: An Economics DebateWas John Maynard Keynes correct, can government fix the mass unemployment generated by a financial slump? Or is that a dangerous delusion as argued by his arch critic, Friedrich von Hayek? Sir Harold Evans chairs...
- Keynes Sobre Inflação, Moeda E Déficits Fiscais
"...Keynes (1919 [1971], pp. 144, 149) laid responsibility for the inflation at the door of the “belligerent governments” during the war, most of whom were continuing to monetize their debts, rather than to pay for their expenditure by raising taxes...
- Dinâmica Macroeconômica: Kalecki
Downloads de textos Os Determinantes de Investimento - Keynes e Kalecki Kalecki, Michal: Teoria da Dinâmica Econômica Kalecki- desenvolvimento econômico Investimentos - Keynes Kalecki Kalecki - um anti-Keynesiano? Socialism--Functioning...
- Por Que (quase) Todos Os Políticos São Keynesianos?
Pedro Albuquerque, do Incentives Matter, responde: "It should not be surprising however that both liberals and conservatives, especially when given political power, love Keynes. Both ideologies nurture deep beliefs in the infallibility of government intervention...