Wednesday, April 25, 2012

Keynes Doesn't Matter

When I read or listen about Keynesian economics, named after John Maynard Keynes, I oftentimes hear others say that our economics have been greatly influenced by Keynes.  It doesn't matter whether the person is a Keynesian, an Austro-libertarian, or someone in between (Chicago school?).  It seems that most people believe that Keynes was a highly influential figure and a big reason for the establishment's belief in government solutions to economic problems.

I don't really buy it.  Keynes was used as an excuse by the establishment to promote their big government programs, big government spending, and debt.  If Keynes had never existed, then the elites who wanted to promote statist economics would have found another "economic expert" to say what they wanted said.

Keynes was actually not dumb.  But his "General Theory" book was mostly incoherent and that happens to be his main work that is used to justify massive government spending and deficits.  The ironic thing is that Keynesians (both today and then) are more Keynesian that Keynes was, if that makes sense.  The followers of Keynesian economics are bigger statists that Keynes ever was and Keynes basically acknowledged that.

Keynes wasn't really influential.  He was made to seem influential by the establishment who wanted cover for their big government policies.  Keynes was their excuse.  They could have found someone else if they had to.

It is not like today's libertarian movement with Ron Paul.  Ron Paul actually has influenced people a great deal.  He has been someone for people to rally behind, but he has also served as an educator to many.  I think we would still have a growing libertarian movement without Ron Paul, but it would be a much slower process.

The good news is that Keynesian economics is losing credibility.  Ron Paul is gaining credibility.  Things could completely reverse one day.  Politicians might one day be forced to actually cut back on government, if bankruptcy doesn't do it first.  Public opinion counts and it is changing.  Regardless of what Keynes actually thought, his followers are becoming less relevant as time goes on.

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