Perhaps nobody shaped the modern world more than John Maynard Keynes.
Those who have studied economics are surely familiar with his name. But I’d wager most of the population isn’t… which is ironic given that his theories have directly impacted all of us.
John Maynard Keynes was the preeminent British economist of his generation. He lived from 1883 to 1946.
It was his book The General Theory of Employment, Interest, and Money that made Keynes so influential. But only because government and Academia loved his general premise.
Keynes effectively flipped economics on its head. And he single-handedly undermined the great stride of progress that had flowed from the classical economists of the 18th and 19th centuries.
Central to Keynes\’ theory was an idea so preposterous, even my 9-year old could quickly debunk it. He asserted that the government should issue debt and spend more money whenever things were slow in the economy. This is where the modern idea of “stimulus” comes from.
This is what made Keynes so popular with government officials. He gave them a green light to run up debt and launch all kinds of uneconomical spending programs.
To be fair, Keynes did say that government should reduce its spending when the economy was humming. He didn’t advocate the perpetual public debt binge that’s occurred over the last few decades.
But policy-makers conveniently ignored that part of Keynes’ theory. And it’s easy to see why. With intellectual cover to issue debt and later print money, governments became massive monoliths that now command multi-trillion dollar budgets.
This is what created the Age of Paper Wealth. It lasted from 1982 to 2022.
Continue reading “Keynesianism is Dead”
