Changes

Although government certainly is necessary, the more efficient private sector is better at creating economically productive jobs and other economic activity such as [[investment|investing.]]

Although government certainly is necessary, the more efficient private sector is better at creating economically productive jobs and other economic activity such as [[investment|investing.]]

In August of 2011, the [[conservative]] author and member of [[Mensa]] [[Vox Day]] wrote:

In August 2011, the [[conservative]] author and member of [[Mensa]] [[Vox Day]] wrote:

{{cquote|...in the 1930s, it was only the USA that attempted to fight the post-1929 economic contraction with [[Keynesian Economics|Keynesian stimulus policies]] and only the USA suffered a [[Great Depression]].  In England, the contraction stopped in 1932, France never saw double-digit unemployment, and the Japanese economy was actually enjoying significant growth. This time, Europe, China, and Japan all followed the US lead and applied their own stimulus plans in 2009, which we are already seeing is now in the process of backfiring on everyone.<ref>[http://voxday.blogspot.com/2011/08/overprepared.html Overprepared]</ref>}}

{{cquote|...in the 1930s, it was only the USA that attempted to fight the post-1929 economic contraction with [[Keynesian Economics|Keynesian stimulus policies]] and only the USA suffered a [[Great Depression]].  In England, the contraction stopped in 1932, France never saw double-digit unemployment, and the Japanese economy was actually enjoying significant growth. This time, Europe, China, and Japan all followed the US lead and applied their own stimulus plans in 2009, which we are already seeing is now in the process of backfiring on everyone.<ref>[http://voxday.blogspot.com/2011/08/overprepared.html Overprepared]</ref>}}

   

   

It is ironic that [[liberal]]s such as [[Barack Obama]] advocate Keynesian economic concepts since they are violating one of John Maynard Keynes' key principles. Keynes advocated having governments run [[budget surplus|budget surpluses]] during good economic times.<ref>EK Brown-Collie and Bruce E. Collier, What Keynes really said about deficit spending, Journal of Post Keynesian Economics, Vol. 17, No. 3, Spring, 1995</ref> In addition, Keynes advocated that governments should increase government spending during difficult times and even engage in [[deficit spending]]. Keynes was against large structural deficits as he believed they are a drag on the economy.<ref>http://money.cnn.com/2010/02/04/news/economy/meltzer_keynes.fortune/</ref>  Liberals such as Barack Obama [[American Recovery and Reinvestment Act of 2009|advocate massive U.S. government spending]] during a period when the federal government already has a [[Obama administration fiscal policy|massive amount of existing debt]]. Furthermore, Obama's colossal government spending was inefficient and [[American Recovery and Reinvestment Act of 2009|did not pull the American economy out of its economic problems]], but merely [[Obama administration fiscal policy|buried the U.S. economy under more debt.]]   

It is ironic that [[liberal]]s such as [[Barack Obama]] advocate Keynesian economic concepts since they are violating one of John Maynard Keynes' key principles. Keynes advocated having governments run [[budget surplus]]es during good economic times.<ref>EK Brown-Collie and Bruce E. Collier, What Keynes really said about deficit spending, Journal of Post Keynesian Economics, Vol. 17, No. 3, Spring, 1995</ref> In addition, Keynes advocated that governments should increase government spending during difficult times and even engage in [[deficit spending]]. Keynes was against large structural deficits as he believed they are a drag on the economy.<ref>http://money.cnn.com/2010/02/04/news/economy/meltzer_keynes.fortune/</ref>  Liberals such as Barack Obama [[American Recovery and Reinvestment Act of 2009|advocate massive U.S. government spending]] during a period when the federal government already has a [[Obama administration fiscal policy|massive amount of existing debt]]. Furthermore, Obama's colossal government spending was inefficient and [[American Recovery and Reinvestment Act of 2009|did not pull the American economy out of its economic problems]], but merely [[Obama administration fiscal policy|buried the U.S. economy under more debt.]]   

==Biography==

==Biography==

Keynes was a founding father of modern theoretical [[macroeconomics]]. Breaking with the [[Neo-classical Economics|neoclassical]] orthodoxy of his era, Keynes argued that macroeconomic relationships differ from their [[Microeconomics|microeconomic]] counterparts. He went on to advocate government intervention into markets and proposed a demand-driven model for money. His theories formed the basis of what came to be known as [[Keynesian economics]].   

Keynes was a founding father of modern theoretical [[macroeconomics]]. Breaking with the [[Neo-classical Economics|neoclassical]] orthodoxy of his era, Keynes argued that macroeconomic relationships differ from their [[Microeconomics|microeconomic]] counterparts. He went on to advocate government intervention into markets and proposed a demand-driven model for money. His theories formed the basis of what came to be known as [[Keynesian economics]].   

Keynes rejected socialism--he did not want government to own or even control industry, but rather he wanted the government to optimize the economy though its "fiscal policies," that is, taxes and spending.  He was a lifelong member of the [[British Liberal Party]], which held few seats in Parliament after 1920.

Keynes rejected socialism—he did not want government to own or even control industry, but rather he wanted the government to optimize the economy though its "fiscal policies," that is, taxes and spending.  He was a lifelong member of the [[British Liberal Party]], which held few seats in Parliament after 1920.

Keynes was, with [[Milton Friedman]] one of the two most influential economists of the 20th century. Keynes, based at Cambridge University, influenced the economics profession in many ways and was surrounded by students and disciples. He was a major adviser to the Treasury during World War II and helped design the postwar "Bretton Woods" international monetary system.  

Keynes was, with [[Milton Friedman]] one of the two most influential economists of the 20th century. Keynes, based at Cambridge University, influenced the economics profession in many ways and was surrounded by students and disciples. He was a major adviser to the Treasury during World War II and helped design the postwar "Bretton Woods" international monetary system.  

{{cquote|The young Keynes displayed no interest whatsoever in economics; his dominant interest was philosophy. In fact, he completed an undergraduate degree at Cambridge without taking a single economics course. Not only did he never take a degree in the subject, but the only economics course Keynes ever took was a single-term graduate course under Alfred Marshall.

{{cquote|The young Keynes displayed no interest whatsoever in economics; his dominant interest was philosophy. In fact, he completed an undergraduate degree at Cambridge without taking a single economics course. Not only did he never take a degree in the subject, but the only economics course Keynes ever took was a single-term graduate course under Alfred Marshall.

...Murray Rothbard says it all: Was Keynes, as Hayek maintained, a “brilliant scholar”? “Scholar” hardly, since Keynes was abysmally read in the economics literature: he was more of a buccaneer, taking a little bit of knowledge and using it to inflict his personality and fallacious ideas upon the world, with a drive continually fueled by an arrogance bordering on egomania. … He possessed the tactical wit to dress up ancient [[statist]] and [[inflation]]ist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of [[statism]] and [[socialism]], of managed and [[planned economy|planning economies]]..<ref>http://centurean2.wordpress.com/2011/03/20/fabian-john-maynard-keynes-the-stealthy-enemy-of-human-freedom/</ref>}}

...Murray Rothbard says it all: Was Keynes, as Hayek maintained, a “brilliant scholar”? “Scholar” hardly, since Keynes was abysmally read in the economics literature: he was more of a buccaneer, taking a little bit of knowledge and using it to inflict his personality and fallacious ideas upon the world, with a drive continually fueled by an arrogance bordering on egomania. … He possessed the tactical wit to dress up ancient [[statist]] and [[inflation]]ist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of [[statism]] and [[socialism]], of managed and [[planned economy|planning economies]].<ref>http://centurean2.wordpress.com/2011/03/20/fabian-john-maynard-keynes-the-stealthy-enemy-of-human-freedom/</ref>}}

=== Dishonesty of Keynes ===

=== Dishonesty of Keynes ===

== Keynesian Economics and Stagflation  ==

== Keynesian Economics and Stagflation  ==

[[File:6a00d8341c60bf53ef011571a57670970b-500wi1.jpg|right|300px|thumb| [http://hotair.com/greenroom/archives/2009/07/19/the-anti-stimulus-in-pictures-any-questions/?print=1 ''Chart courtesy of Duane Lester''] ]]

[[File:6a00d8341c60bf53ef011571a57670970b-500wi1.jpg|right|300px|thumb| [http://hotair.com/greenroom/archives/2009/07/19/the-anti-stimulus-in-pictures-any-questions/?print=1 ''Chart courtesy of Duane Lester''] ]]

In February of 2010 the ''[[Washington Times]]'' reported:

In February 2010 the ''[[Washington Times]]'' reported:

{{cquote|Prices rose 2.7 percent during 2009, according to the Bureau of Labor Statistics' recent update of the Consumer Price Index (CPI). This is a worrisome fact because last year's unemployment rate averaged more than 9 percent. This trend may signal a return of "stagflation," a merger of stagnation and [[inflation]].

{{cquote|Prices rose 2.7 percent during 2009, according to the Bureau of Labor Statistics' recent update of the Consumer Price Index (CPI). This is a worrisome fact because last year's unemployment rate averaged more than 9 percent. This trend may signal a return of "stagflation," a merger of stagnation and [[inflation]].

As is evident, Keynesian thinking went on to influence the fiscal policy of many governments, as well as influencing a generation of economists. "We are all Keynesians now," said President Richard Nixon in 1969.

As is evident, Keynesian thinking went on to influence the fiscal policy of many governments, as well as influencing a generation of economists. "We are all Keynesians now," said President Richard Nixon in 1969.

Keynesianism became the dominant policy in the U.S., Britain and Canada, and a few smaller countries, after 1945. The economic disciples were themselves too young to take much credit--not until the 1960s would they be top government advisers.  However Keynesianism suited the needs of many key players. To politicians it gave a formula that demonstrated they were doing something to avoid another Great Depression.  Liberals and labor welcomed the high government spending. Businessmen were relieved that Keynesianism a barrier to nationalization of industry  or government ownership and socialism. Indeed the Keynesians paid little attention to control or regulation of specific industries; that was unnecessary said the Keynesian model, because tax rates and government deficits or surpluses were paramount.

Keynesianism became the dominant policy in the U.S., Britain and Canada, and a few smaller countries, after 1945. The economic disciples were themselves too young to take much credit—not until the 1960s would they be top government advisers.  However Keynesianism suited the needs of many key players. To politicians it gave a formula that demonstrated they were doing something to avoid another Great Depression.  Liberals and labor welcomed the high government spending. Businessmen were relieved that Keynesianism a barrier to nationalization of industry  or government ownership and socialism. Indeed the Keynesians paid little attention to control or regulation of specific industries; that was unnecessary said the Keynesian model, because tax rates and government deficits or surpluses were paramount.

==Criticism of Keynes and Keynesian Economics==

==Criticism of Keynes and Keynesian Economics==

By the 1970s  Keynesianism had run out of steam, and its theoretical model could not account for "stagflation" -- the simultaneous case of high inflation and slow growth that dragged on in the 1970s.

By the 1970s  Keynesianism had run out of steam, and its theoretical model could not account for "stagflation"—the simultaneous case of high inflation and slow growth that dragged on in the 1970s.

New models from the [[Chicago School of Economics]] (led by [[Milton Friedman]]), were fresher and more appealing. [[Margaret thatcher]] in Britain and [[Ronald Reagan]] in the U.S. explicitly disavowed Keynesianism in favor of Chicago models.

New models from the [[Chicago School of Economics]] (led by [[Milton Friedman]]), were fresher and more appealing. [[Margaret thatcher]] in Britain and [[Ronald Reagan]] in the U.S. explicitly disavowed Keynesianism in favor of Chicago models.

* Moggridge, D. E. ''Maynard Keynes: An Economist's Biography'' (1995) [http://www.questia.com/library/book/maynard-keynes-an-economists-biography-by-d-e-moggridge.jsp online edition]

* Moggridge, D. E. ''Maynard Keynes: An Economist's Biography'' (1995) [http://www.questia.com/library/book/maynard-keynes-an-economists-biography-by-d-e-moggridge.jsp online edition]

* O'Donnell R. M. ''Keynes: Philosophy, Economics & Politics.'' (1989).  

* O'Donnell R. M. ''Keynes: Philosophy, Economics & Politics.'' (1989).  

* Patinkin, Don. "Keynes, John Maynard", in ''The [[New Palgrave: A Dictionary of Economics]]'', v. 2, 1987, pp. 19-41.  

* Patinkin, Don. "Keynes, John Maynard", in ''The [[New Palgrave: A Dictionary of Economics]]'', v. 2, 1987, pp.&nbsp;19–41.  

* Skidelsky, Robert.  ''John Maynard Keynes: Hopes Betrayed 1883-1920'', (1992), the standard scholarly biography [http://www.amazon.com/John-Maynard-Keynes-Betrayed-1883-1920/dp/014023554X/ref=sr_1_5?ie=UTF8&s=books&qid=1237121695&sr=8-5 excerpt and text search]

* Skidelsky, Robert.  ''John Maynard Keynes: Hopes Betrayed 1883-1920'', (1992), the standard scholarly biography [http://www.amazon.com/John-Maynard-Keynes-Betrayed-1883-1920/dp/014023554X/ref=sr_1_5?ie=UTF8&s=books&qid=1237121695&sr=8-5 excerpt and text search]

** ''John Maynard Keynes: The Economist as Saviour 1920-1937'', (1994)

** ''John Maynard Keynes: The Economist as Saviour 1920-1937'', (1994)

* Skidelsky, Robert.  ''Keynes'' (1996), 144 pp  

* Skidelsky, Robert.  ''Keynes'' (1996), 144 pp  

===Primary sources===

===Primary sources===

* Keynes John Maynard. ''The Collected Writings of John Maynard Keynes,'' 30 Vols., ed. by Sir Austin Robinson and Donald E. Moggridge. (1971-89).

* Keynes John Maynard. ''The Collected Writings of John Maynard Keynes,'' 30 Vols., ed. by Sir Austin Robinson and Donald E. Moggridge. (1971–89).

==External Links==

==External links==

*[http://www.econlib.org/library/Enc/bios/Keynes.html John Maynard Keynes Biography] from ''The Concise Encyclopedia of Economics''

*[http://www.econlib.org/library/Enc/bios/Keynes.html John Maynard Keynes Biography] from ''The Concise Encyclopedia of Economics''

*[http://www.econlib.org/library/YPDBooks/Keynes/kynsCP.html J.M. Keynes, ''The Economic Consequences of Peace'']  

*[http://www.econlib.org/library/YPDBooks/Keynes/kynsCP.html J.M. Keynes, ''The Economic Consequences of Peace'']  

==References==

==References==

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