Saturday Book Review: Keynes the Man by Murray Rothbard
Disappointingly, this is not “Keynes is THE Man!”, it is “Keynes the Man through the prism of the biased Rothbard.”
As Nixon said, “We’re all Keynesians now”, and whether Murray Rothbard wants to accept that or not, it is true. Keynesian economics dominates academia and government policy. That is obviously because it has been proven correct.
Rothbard was an Austrian economist and thus mostly unheralded. There is no doubt in my mind that Rothbard’s jealousy of Keynes success played a part in his decision to write a smear piece against Lord John Maynard Keynes.
Lord Keynes was born into a life of privilege, but he did not rest on his laurels. He used his connections and position he was born into to gain even more power and influence.
He was incredibly intelligent and shrewd, at times calling for free trade and other times calling for protectionism. While some (such as Murray) might call this hypocritical, it was really just a shrewd move to gain more political power and influence.
Keynes magnum opus, The General Theory, was published in 1936. Even Murray admits it was:
…at least in the short run, one of the most dazzlingly successful books of all time. In a few short years, his “revolutionary” theory had conquered the economics profession and soon had transformed public policy…
Murry then goes on to claim that The General Theory was so widely accepted not because it works, but because governments at the time were seeking more revenue and power and thus were more than willing to put Keynes’ ideas into practice. What he advocated is essentially a public/private capital structure which some might call fascism, but that’s got such a negative connotation these days. Crony capitalism is probably more appropriate.
So the rest is essentially living history as we continue to put Keynes’ theories (how many times do they have to be proven correct before we just call them “laws” instead of “theories?) into practice.
In summary, Murray Rothbard wrote a hit piece against a man who isn’t here to defend himself. In reality though, Keynes doesn’t need defending because his economic theories drive the crony-capitalist, power-hungry political reality that is in practice across the world today. You could say Keynes is the reason America is what it is today.
Nixon had it right, we’re all Keynesians now whether Murry and his kook-disciples like it or not.