It is not often that Paul Samuelson and Paul Krugman are indicted for lack of fidelity to Keynes, but this is exactly Paul Davidson’s complaint against them. He says they have been untrue to Keynes’s radical vision. FULL ARTICLE
Source link: http://archive.mises.org/10850/the-keynes-solution/
The Keynes Solution?
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Modern Keynesians remind me a whole lot of modern Marxists: neither can agree on what their idol said or meant. That happens with Keynes because he was deliberately obscure on issues he didn’t understand very well. And he flip flopped regularly. As most Austrians know, he replied to Hayek’s criticism of his book on money by saying he no longer believed all of that. Keynes was a lot of things, but he was never consistant. So Davidson may have understood Keynes correctly, or he may not have. Who’s to tell?
I read the book yesterday. There’s an interesting bit when the author claims Keynes didn’t think much of the “paradox of thrift” idea that is attributed to him.
It shouldn’t surprise anybody that the newest Keynesian line is that Samuelson and Krugman aren’t “real” Keynesians and that, if only, we would adopt the policies that the notorious pseudoeconomist actually advocated, we would live in a golden age of prosperity.
It is particularly amazing that Davidson has decided to take one of Keynes’s most embarrassing articles, in which he wrote apologia for the protectionist policies of the 1930s, policies that worsened the depression and led to World War.
If we want “global economic prosperity,” we need to relegate Keynes’s “economics” to the same trash can that Marxist “economics” have been relegated to. Keynesianism has no solution for our problems and is just as dead wrong as Monetarism, Mercantilism, and Communism.
Wow–maybe Keynesian infighting can become a new economic sport, and the target of more Mises articles…
Although I agree with a lot being said, let’s not attribute “infighting” to only the Marxists and Keyensians. Let us remember that not everybody in the Austrian school agree on what Mises or Hayek said (especially in regards to inflation and fractional reserve banking). So, let’s not go too far in criticizing other schools of thought, and then avoid realizing that we commit the same “mistakes” (mistakes only because people here apparently consider them to be mistakes).
I kinda thought the “infighting” among libertarians and Austrians went without saying, since we experience it so much. But seeing other groups’ infighting is not merely fun, but enlightening. If Keynes is difficult to understand, who better to clarify than two Keynesians arguing about what Keynes really meant?
This discussion brings up the old phrase: in order to get 3 libertarians to agree on anything, you have to shoot 2 of them.
Ignore my above post, I meant the liquidity trap, not paradox of thrift!
The picture on the cover of a hand holding the globe is symbolic Keynesian interventionism.
Sure Davidson can float words around and pretend to solidify what Keynes meant but unless and until he addresses ego-driven interventionism he completely misunderstands Keynes.
It seems that the Post-Keynesians are trying to create a false dichotomy, where they can, by process of elimination, show that a synthesis between Keynes and Marx best explains economic phenomena. A Post-Keynesian professor of mine was a student of Haberler, and yet, he never mentions the Austrians in anyway whatsoever, but is quick to point out the err in mathematics and statistics when applied to economics.
Of his novel ULYSSES, James Joyce (1882-1941) observed, “I put in so many enigmas and puzzles that it will keep the professors busy for centuries arguing over what I meant.” Well, centuries have yet to pass, but 91 years after it was published professorial arguments regarding Joyce and his magnum opus continue unabated.
Although 16 fewer years have passed since its publication, much the same can be said of Keynes (1883-1946) magnum opus, THE GENERAL THEORY, ETC. A search of the word “Keynes” limited to Mises.org shows 2010 returns from among Daily Articles and 1250 among the site’s Literature.
I may be prejudiced, but I think Joyce’s style in Ulysses intentionally demonstrates his brilliant literary genius, whereas Keynes in his General Theory, in which he may have parroted Joyce’s voice, was intentionally obscurant to disguise his ignorance of certain classical economic theories. If not, the only explanation I have for GT’s discombobulated discourse on matters economic is that it is nothing more than a thoroughly dishonest but brilliantly contrived piece of Marxian-socialist propaganda.
It’s kind of like the ideological fight between the Democrats and the Republicans. Lot’s of talk about nothing so long as the talk is about nothing. Get down to the underlying real issues, and they’re both in favour of more government and more printing. Just for different “ideological” reasons and by different “ideological” intent via the same means.
Keynes’ obfuscation and flip-floppyness is perfect for politics and political milking of grant money. Anyone can come up with a justification for just about anything, and get the grant, so long as the bottom line is in favour of the powers-that-be.
I don’t see “infighting” among Austrians so much as a creative, constructive process of a sound body of economics.
We can see examples of these slight differences in “magnum opuses” (magnum opii? =P) such as Mises’ Human Action, Rothbard’s Man Economy and the State and Reisman’s Capitalism: A Treatise on Economics
Another pro is that this serves as reputation to the ignorant faggots that insist on saying the Austrian School is dogmatic because they don’t understand it and we don’t use stupid equations
PS: I would like to give props to Tyler Cowen, who, so far as I know, was the only economist I’ve ever seen criticize ABCT and actually understand it.
PPS: Incidentally, he also predicted the bursting of the bubble in a hilarious article entitled If I believed in Austrian business cycle theory
“This neutral money axiom asserts that any increase in the supply of money into the economy will affect neither the volume of goods produced nor the level of employment in the economy”
In a moral society a child of six would have no trouble recognizing the validity of this axiom yet todays supposed best and brightest can’t wrap their excuse addicted minds around it.
Typo: refutation, not reputation, my bad
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