For about three decades, from the mid-1930's until the mid-1960's, the economic ideas of one man ruled the Western world: John Maynard Keynes. Even today, his aging disciples have only recently begun to retire from university teaching in sufficient numbers, so as to allow a serious debate in economics to re-appear after half a century in the better universities. In the second-rate and third-rate colleges, Keynes' ideas are still dominant.
Who was John Maynard Keynes? He was the son of British economist John Neville Keynes. He was a brilliant essayist with a wide-ranging mind. He made his reputation with a book on the theory of probability, not economics. He was also a man who never went through the boredom or the discipline of a graduate program in economics. He earned a bachelor's degree and quit. Smart man. He was hired to lecture in economics program. He wrote his way into prominence.
His ideas laid the foundation of the "mixed economy" part free market, part government planning, and completely inflationary. As he grew older, his books became increasingly incoherent and steadily more popular, for each book increasingly promoted national economic planning. The politicians loved him: he was giving academic reasons for budget deficits, price controls, and monetary inflation. The younger economists loved him, for his ideas were creating lifetime employment opportunities for them as government economic planners.
It was Keynes, more than any man in the twentieth century, who is intellectually responsible for today's looming bank crisis, the huge government deficits, and the eventual default of governments on their financial obligations.
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