John Maynard Keynes is most famous for two statements.
This first appeared in the final paragraph of his General Theory of Employment, Interest, and Money (1936).
The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist (p. 384).
The second is short and sweet: “In the long run we are all dead.” That is from his Tract on Monetary Reform (1923). It appears in a typically obtuse Keynesian passage.
Now ‘in the long run’ this is probably true. If, after the American Civil War, the American dollar had been stabilized and defined by law at 10 per cent below its present value, it would be safe to assume that n and p would now be just 10 per cent greater than they actually are and that the present values of k, r, and k? would be entirely unaffected. But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
When Keynes wrote biographies, he was lucid. When he wrote economics, he was incoherent. This is because he understood human motivation, but he did not understand economics.
This is why Keynenianism is so vulnerable. It is incoherent. Keynes was incoherent before he became a Keynesian. He produced multiple theories of economic causation at various times in his career. Not one of them made sense.
His disciples are saddled with the unenviable task of defending and then extending the writings of an incoherent author of various incoherent theories of economic causation. Keynes really was the emperor who had no clothes (in more than one sense).
He is, in short, a sitting duck. So are his acolytes.
THE POST-CRASH MARKET FOR A NEW ECONOMICS
When the present deficit-based world economy comes crashing down on the heads of the masses, it will also come crashing down on the world economic establishment that has used Keynes’ name to defend the deficit-based, fiat money-based monstrosity that national governments have created. The General Theory from the beginning was a belated apologia for the early stages of this deficit-based monstrosity.
Keynes in half a century will be regarded as the equivalent of Ptolemy. No one reads Ptolemy’s astronomical works. Almost no one ever did. His celestial spheres came crashing down in the 16th century.
It takes entrepreneurship to see what is coming: an economic crash and increased demand for non-Keynesian explanations.
(For the rest of my article, click the link.)