Tuesday, April 21, 2009

Why I Mock John Maynard Keynes

In case anyone has missed it, we are in a bit of a fix financially, on a global basis. The policy works and mandarins of assorted stripes generally responsible for keeping this sort of thing from happening are perplexed, and more than aggravated that a number of the formerly reliable levers that worked when employed now produce--when tugged--nothing. New techniques from the bottom of the toolbox are being taken out--quantitative easing--and much dark muttering of 'pushing on a string' can be heard in the distance, in the darkness.

So, if the macroeconomic tools of a lifetime and the institutional expertise of the worlds central banks and international monetary authorities has most its magic, it's time for something else. Because most of these guys were trained in the second half of the 20th century, and because John Maynard Keynes was the fellow whose approach had been most recently superceded, there is a group grope of the Keynesian canon, for something that, if not functional, at least sounds profound.

That's why I mock all the invocations of J.M. Keynes. If you actually go back and read the guy, he has some interesting observations that shed light on the current mess. For that matter, so does Ezra Pound. But the solution is no more to be found in Keynes' writings than in Pound's Cantos. And the aspects of Keynes that are being invoked are among the least interesting of his observations (to me, at least, I find his policy prescriptions pretty pedestrian, while his conjectures on how his world got in its fix quite intriguing in the application to the current fiasco).

So, my first alternative is Marxist economic analysis. Unfortunately, while the Marxists have some great one-liners, as I've tried to deploy what I remember of Marxist economics to the current situation, I find that it really doesn't work very well. It is destructively inspirational, rather than immediately applicable.

But more of that another time.


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