Thursday, April 21, 2011

Keynes Reached His Long Run

Sixty-five years ago today John Maynard Keynes breathed his last. Keynes was famous for, among other things, saying "In the long run, we're all dead." That quip has been taken to mean that when there is a serious crisis, wise people are willing to focus on fixing economic problems in the short run and not failing to act, fearing negative long run economic consequences. After all, in the long we are all dead.

That Keynes' economic theories and policies have been both highly influential and economically destructive is no secret to readers of this blog. The problem, as Rothbard once said, is that Keynes is dead and we are still living in his long run.

For a good, brief discussion of the essence of Keynes' economic thought and policy, I recommend, Ludwig von Mises' "Lord Keynes' and Say's Law." For a more extensive treatment of Keynes' economic thought, I recommend "The Misesian Case Against Keynes" by Hans-Hermann Hoppe. For a very revealing look at person and influence of Keynes I recommend Rothbard's "Keynes the Man."

One of the earliest articles I wrote as a new professor was "Keynes the Great?" a response to Paul Krugman's lauding of Keynes in a column he wrote in Fortune magazine. My analysis of Keynesian economics is found in Chapter 13 of Foundations of Economics.

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