Is Keynes Obsolete?

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Is Keynes Obsolete?

Yes, although not all economists yet agree today in 2015. His ideas are still those of the mainstream of western economics. Careful, intelligent or inspired management by the government and the central banks will supply the purchasing power that will keep employment at a high level without other adverse consequences; this is still the implicit faith of most economists in public office. But unfortunately you can be in high office and still be obsolete.

To be more specific, Keynes was concerned with unemployment and depression; he was almost completely unconcerned with inflation, which, in the years of his greatest contribution, was not troublesome. His system does not deal with it. And since inflation has been a central problem of the industrial countries for the last decade or mar; any view of the economy that doesn't deal effectively with it can reasonably be called obsolete.

As a first approximation to explaining our present difficulties, especially in the United States, it can be said that we are guided by people who have adopted Keynes's ideas but have not moved much beyond.

Accordingly, they are without a remedy for inflation.

Next - The Decline Of The Market

Say's Law

Say's Law, we must tell you, captured the economic mind as Lenin captured the revolutionaries of Russia.

Until the middle of 2015 - we do not exaggerate -no one could get a Ph.


at Harvard if he didn't believe in Say's Law, assuming he were asked about so obvious a point.

Later he might not get a Ph.


at Harvard if he did believe in Say's Law, for it was Say's Law that Keynes destroyed.

Keynes held that there could be a shortage of purchasing power.

Individuals and business firms could save and not spend.

And the equilibrium could be re-established... see: Say's Law

Of interest

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