Keynesian Economics: A Theory With 80 Years Of Failure
A trader works on the floor of the New York Stock Exchange.
(Photo by Spencer Platt / Getty Images)
“John Maynard Keynes is considered one of the leading lights of liberal economics.”[1] He is currently, and remains, the most significant economist to impact America’s economy in modern times. As discussed in previous articles (here, here, here, and here), the adaption of Keynesianism has proven very tragic and deviated from the economy set forth by our Founding Fathers – a free-market, capitalistic economic system bound to freedom and liberty of the individual. Keynes’s 1935 work, The General Theory of Employment, Interest, and Money, was his magnum opus. It is considered the 20th century masterpiece of economics. However, upon reading Keynes’s masterpiece, the question of “why?” swiftly rises to the surface.
General Theory was very poorly written. Often, throughout the book, what could and should be explained succinctly in a page or two, Keynes stretches out over many more pages and riddles his words with an abundance of academic drivel. In Keynes’ defense, he does acknowledge this at the beginning of the book. In the first sentences of his preface Keynes states,
This book is chiefly addressed to my fellow economists. I hope that it will be intelligible to others. But its main purpose is to deal with the difficult questions of theory, and only in the second place with the application of this theory to practice…Thus I cannot achieve my object of persuading economists to re-examine critically certain of their basic assumptions except by highly abstract argument and also by much controversy.[2]
In his own words, Keynes’ purpose is theory, not application. Austrian economist Richard Vedder confirms that, “Keynes’s work, however, was more of a theoretical treatise than an explicit explanation of the Depression. Empirical support for his ideas was surprisingly skimpy.”[3]
So perhaps the needed question is: Which economists of today follow such academic drivel with now eight-plus decades of economic history which illustrates its failure? Answer: No economist which Americans should ever give any credit or confidence to.
[1] Ken Blackwell, December 21, 2009, “In the Long Run…,” townhall.com, [http://townhall.com/columnists/kenblackwell/2009/12/21/in_the_long_run%e2%80%a6/page/full/]. Mr. Blackwell writes a very interesting and enlightening article about Keynesianism and John Maynard Keynes.
[2] John Maynard Keynes, 1964 (originally published in 1936), The General Theory of Employment, Interest, and Money, (First Harvest/Harcourt, Inc.: Orlando, FL), p. v (emphasis added).
[3] Richard Vedder, Spring 2010, “Explaining the Great Depression,” Claremont Review of Books, Vol. X, No. 2, p. 45.
Originally published on Townhall Finance.
Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.
Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.
Trending Now on Affluent Christian Investor
Sorry. No data so far.
Right Report
Follow Us
The Affluent Mix
Biden Oblivious To Illegal Immigration Issues... August 2, 2021 | Frank Vernuccio
Rob Arnott On Bubbles, Inflation, And Once-In-A-Generation Investment Opportunit... August 2, 2021 | Jerry Bowyer
The Federal Reserve’s Massive Theft Of Stability... August 2, 2021 | Jim Huntzinger
What To Do About This Difficult Market? August 2, 2021 | David Bahnsen
Letter On The Politicization Of Corporations... July 26, 2021 | Jerry Bowyer
Peak Of The Fake Bull Market July 26, 2021 | Michael Pento
Woodrow Wilson’s Administrative State vs. Gold... July 26, 2021 | Jim Huntzinger
Dividends, Energy, And Crypto July 26, 2021 | David Bahnsen
Whose Side Are You On? July 26, 2021 | Frank Vernuccio
Media, Left Ignore These Dangers July 19, 2021 | Frank Vernuccio
Mark Skousen On FreedomFest And How To Measure The Whole Economy... July 19, 2021 | Jerry Bowyer
Quantifying The Quantitative, Or Making Easy The Easing... July 19, 2021 | David Bahnsen
The Gold Standard Means A Rising Standard Of Living... July 19, 2021 | Jim Huntzinger
Book Review: Brian Domitrovic Reveals The Monetary Genius Of Arthur Laffer... July 19, 2021 | John Tamny
Steve Forbes: Time To Worry About Inflation, Not Hyperinflation... July 12, 2021 | Jerry Bowyer
UFOs Rescue Biden July 12, 2021 | Frank Vernuccio
Read This Classical Economist’s 200 Year Old Warning About Paper Money... July 12, 2021 | Jim Huntzinger
How Central Banks Murdered The Markets July 12, 2021 | Michael Pento
Everything There Is To Know About The Stock Market... July 12, 2021 | David Bahnsen
AT&T CEO: We’re Ill Equipped For Politics, And We’re Spending A Lot Of ... July 6, 2021 | Jerry Bowyer
Internet Bias Distorts National Conversation... July 6, 2021 | Frank Vernuccio
The Halfway Point Of 2021 July 6, 2021 | David Bahnsen
Join the conversation!
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse.