The timing of this editorial from The Guardian could hardly be better.
In praise of … John Maynard Keynes
Editorial The Guardian, Thursday October 9 2008
He was about the last person you would expect to devise an economy theory for state intervention. Educated at Eton and Cambridge, a don with a flair for making money, and a Bloomsbury group aesthete, John Maynard Keynes enjoyed nothing more than proving Victorian morality wrong. So he relished the paradox of thrift: the idea that if everyone saves at the same time, the collapse in demand drags down national income to the point where the value of what is being saved is reduced. Keynes’s greatest thinking is contained in an indigestible tome called The General Theory of Employment, Interest and Money – a title which aped Einstein’s magnum opus (modesty was not one of Keynes’s many favourable attributes). In it, he said that government action was often the only route out of recession; that insight still provides our best hope of avoiding a rerun of the Great Depression today. No intellectual was more engaged with the world of his times. After the first world war, he was a delegate to the Paris peace conference, where he predicted the trouble that would flow from the vindictive war reparations being imposed on Germany; after the second, he brokered the creation of the Bretton Woods system. His name was posthumously associated with the sloppy notion that paying ourselves ever more would lead to prosperity, but his thinking was more subtle than that. Keynes had no patience with economists who argued that everything would work out in the long run. He wrote: “In the long run we are all dead.”
Many of the problems we have today spring from the fact that for the last two decades there was widespread refusal to examine clinically any theory we did not like. WhatThe Guardian calls “the sloppy notion that paying ourselves ever more would lead to prosperity” was attributed to Keynes simply because those who said they knew what Keynes was all about said so and it suited a great many listeners believe them.
Of course we have to remember that within our own lifetime – well, within my own lifetime – that John Kenneth Galbraith‘s stock has risen and fallen. anthat It’s off to Amazon to reacquaint myself with his book, The Affluent Society (1958), I think.