Just saying:
He was right.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Keynes was correct eighty-odd years ago and is correct today. A truism, I would claim, yet lost on 95% of economics undergraduates because they won’t get the chance to discuss it with their professors. Their counterclaim will be that this is a normative statement from Keynes, which it is, and doesn’t belong in their mathematical models.
I would argue that Keynes was basing his view on what he believed Economics was really about i.e. optimal allocation of scarce resources for the betterment of society as a whole. This is the definition I would always give to students.
I believe the more modern definition brings profit into it, which for me is something different, namely business raison d’être. That’s fair enough, but society cannot operate as a business and aim for a surplus while neglecting the basic needs of citizens. That last sentence should be obvious to everyone, but it isn’t.
Maybe it’s because( despite Richard’s best efforts) these people believe a deficit is equal to a loss. Keynes knew it wasn’t all those years ago and he was by no means the first economist to know this.
Much to agree with
Yes, saw that an posted it to another forum I am on.
No response of course!
As yesterday was the 250th anniversary of the publication of The Wealth of Nations, you had the usual fanboys on X, led by that renowned banker Matt Ridley, best known as chairman of Northern Rock when it went down, praising Adam Smith as the archetypal proponent of individualism as the only way forward. Others pointed out that Smith was not a laissez-faire capitalist and believed in regulation. Ridley and his followers wouldn’t listen.
Typical! Their denial of reality is consistent. I will give them that.
It has long amused me that the loudest proponents of Adam Smith, notably the Adam Smith Institute, have clearly never read Wealth of Nations properly, let alone Theory of Moral Sentiments. Smith knew only too wealth how unfettered capitalism would behave.
He’d be saying ‘I told you so’ if alive today!
As for Keynes, the combination of his thinking along with Beveridge is 100% relevant today. Add in Minsky’s observation on the madness of markets
Thanks, Robin. Agreed.
he said many things which remain so true – “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.”
The late great Adam Smith wrote this in An Inquiry into the Nature and Causes:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages”
We don’t have high streets with all three of those professions practicing independently within a 5 minute walk any more, but Smith’s point still stands. What other motivation could there be for the people putting roast chicken in your basket to use a modern turn.