Keynesian Economics — A Critique

There are few occasions when so abstruse a discipline as theoretical economics enters into general currency. Adam Smith’s unseen hand and Marx’s surplus value are the two main examples up to the present in which recondite notions were absorbed into popular ideology. In this way an economic theory has been frequently employed as an elaborate rationalization of what was thought to be desirable social action. This was particularly the case in times of crisis, when the demand for getting something done was persistent. And the theorist who was able to supply the answers was often accorded the role of hero.

This was the pleasant fate of John Maynard Keynes, whose impact on popular thinking has been the greatest since Smith, Ricardo and Marx. New Dealers grasped at his theories to justify what it was they were doing. Keynes himself had a rather happy facility for recognizing history as it moved, and he was not averse to suggesting that its motion was essentially Keynesia...