I mention Keynes often — for good reason.

The trouble with Keynes was almost from the moment he first wrote he was misinterpreted — most spectacularly by Paul Samuelson in the USA but also by Hicks in the UK.  Their vesions of Keynesianism — which weren’t what Keynes prescribed —failed.

This is made very, very clear in a book now out in paperback and so vastly more affordable than it has been of late. Entitled ‘Keynes betrayed’ I’ll declare a sort of interest — which is that I enjoy the company of its author, Geoff Tily.

As a review published recently says:

Geoff Tily works for the Government Statistical Service, in HM Treasury. Some years ago, he took a Masters in Economics at UCL and then a PhD, which resulted in this book — published as a learned, expensive and surely minority interest hardback at the beginning of 2007. This might not sound the ideal recipe for a ripping read. But many who read it raved about it — including eminent economic historians. “Above all, this book is a good read, which may achieve that rare combination of a high level of scholarship with relevance to the policy adviser,” wrote Mark Hayes, of Robinson College, Cambridge. “This is an extraordinary book and a major and significant contribution to Post-Keynesian literature,” said Jan Toporowski, Reader at the School of Oriental and African Studies.

So Palgrave Macmillan — Keynes’s own publisher — has reissued it in paperback, with a new author’s preface explaining its immediate relevance to the financial crisis, but with minor changes otherwise.

What’s all the fuss about then? Well, unlike most books on economics, this one is beautifully written, with only the simplest few equations, no acronyms or abstruse jargon in sight, and not too long. In three parts — History, Theory, and Macroeconomics after Keynes — Tily explains carefully and clearly what Keynes was concerned about and actually wrote; how that was used and abused by his contemporaries for their own academic purposes; and what are the implications of his persuasive arguments for the contemporary policy debate.

And the review draws out a key element of Geoff’s work:. 

Tily argues in his new preface, at first surprisingly but ultimately convincingly, that it follows that Keynes’s own view would have been that the problems of the last decade have been caused by so much credit advanced not at interest rates that were too low, but rather too high — and that the multitude of derivatives (CDO¬? and so on) were then spawned in a doomed attempt to lower the effective cost of the debt burden assumed.

The review says:

It is a work of inspiring scholarship that will surely make a great present for someone interested in both economics and the history of the mid-twentieth century who would like to understand more about whom to support in the current vigorous policy debates: Krugman or Rogoff? Wolf or Osborne? And just what Keynes himself would have thought about what they have to say, and to say about what he had to say (or what in fact the mythical “Keynes” had to say, as it turns out). Do buy!

I second that. One source is here.