Sunday, January 04, 2009

Keynes the Jokester?

I spent much of my recent vacation reading Henry Hazlitt's chapter-by-chapter demolition of Keynes's The General Theory of Employment, Interest, and Money (1936), The Failure of the "New Economics" (1959). I didn't expect to read the book cover to cover, but after only a few pages I had to keep going. It is that well-written and interesting. I'm now a few pages from the end.

The more I read the more I thought: Keynes was surely joking. No one in his position could really be that confused, contradictory, and ignorant of economic logic. It had to be a gag on the economics profession, an emperor-with-no-clothes experiment.

Thus I smiled when I got to Hazlitt's statement in chapter XXV, "Did Keynes Recant?" (p. 398):
Keynes was a brilliant man. Much of what he wrote he wrote in tongue-in-cheek, for the pleasure of paradox, to épater le bourgois [shock the middle class], in the spirit of Wilde, Shaw, and the Bloomsbury circle. Perhaps the whole of the General Theory was intended as a huge (400-page) joke, and Keynes was appalled to find disciples who took it all literally.
If it was a joke, Keynes helped inflict much misery and oppression on innocent people just for a laugh. I guess for the elitist Keynes, the well-being of the masses can't be allowed to impede his bold and daring lifestyle. It is for people like him that secularists like me wish there was a place of fire and brimstone.

At any rate, I highly recommend Hazlitt's book. Don Boudreaux says that Richard Dawkins's The Blind Watchmaker proves that any subject, no matter how complex, can be written about clearly and accessibly. I say the same about The Failure of the "New Economics."

Cross-posted at Anything Peaceful and Liberty and Power.
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6 comments:

  1. AnonymousJanuary 4, 2009 at 9:34 PM

    "If it was a joke, Keynes helped inflict much misery and oppression on innocent people just for a laugh. I guess for the elitist Keynes, the well-being of the masses can't be allowed to impede his bold and daring lifestyle. It is for people like him that secularists like me wish there was a place of fire and brimstone."

    I wonder if you're misplacing blame just a bit, Sheldon. If there were no State to put Keynes' crackpot ideas to their purposes, then he would be remembered on the order of Swift and his modest proposal. Or maybe you're right that Keynes should have made it clearer that his work was satire, like Swift did.

    Either way, the State would have discovered Keynes' ideas independently, and there are probably myriad historical examples of Keynesian economics anyway.

    After all, do you really think Machiavelli told the Duke anything he didn't already know?

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  2. Sheldon RichmanJanuary 5, 2009 at 6:08 AM

    As Mises pointed out, Keynes was a symptom, not a cause, of his times. Keynes himself noted that, despite his proclamation of a New Economics, his ideas were a throwback to the mercantilists and the money cranks who preceded him. He praised the Medieval ban on usury.

    To make the record clear, I am not saying I think Keynes had his tongue in his cheek. One could construct a story advancing that proposition, a major piece of which would be Keynes's own hint at recantation late in life, when he said nice things about classical economics and criticized "modernist stuff." But that wouldn't prove the case. It's just possible Keynes was blinded by ambition and really believed the stupid things he wrote.

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  3. AnonymousJanuary 5, 2009 at 2:37 PM

    I guess Vonnegut was right when he wrote in Mother Night, "One is what one pretends to be, so one must be very careful what one pretends to be."

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  4. liberranterJanuary 5, 2009 at 4:26 PM

    The more I read the more I thought: Keynes was surely joking. No one in his position could really be that confused, contradictory, and ignorant of economic logic. It had to be a gag on the economics profession, an emperor-with-no-clothes experiment.

    A joke it might have been, and indeed no rational person would find it easy to believe that Keynes was clueless enough to really believe the nonsense he wrote. Ever the cynic, I have to believe that cynicism and misanthropy were at the heart of it all and that Keynes was just vain enough to sacrifice, without a second thought, global economic stability in order to make a name for himself.

    To invert an old maxim, never attribute to stupidity that which can easily be explained by malice.

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  5. AnonymousJanuary 11, 2009 at 6:55 PM

    I’m the guy that found the old tape of Friedrich Hayek where he explained that Keynes had told him that Keynes’ “General Theory” was just a ruse to lower British wage rates in the 1930s in order to cure British unemployment through purposeful central bank inflation.

    http://consultingbyrpm.com/blog/2008/12/hayek-tells-bill-buckley-that-even.html

    There’s your Keynesian stimulus for curing unemployment.

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  6. Sheldon RichmanJanuary 11, 2009 at 8:37 PM

    Thanks for the link!

    ReplyDelete