NPR’s Morning Edition ran a three part series on the some of the people most influential in modern economics. Well, three people — Ayn Rand, Friedrich von Hayek, and John Maynard Keynes.
The series is a good one, and each piece is pretty good at explaining what the economists and Rand were about and why you should know them and their work.
There’s not much that survives of Keynes’ own spoken words, but he can be heard in an old British newsreel, in which he delivered a stern admonition.
“We must free ourselves from the bondage of old ideas,” he said.
One of the “old ideas” Keynes sought most to debunk was the notion that economies in trouble would naturally fix themselves, thanks to the magic of the marketplace. Princeton economist Alan Blinder says Keynes put his finger on a key economic problem — namely, that insufficient demand leads to growing unemployment.
“It’s very simple, that if there aren’t enough buyers, the sellers won’t produce,” Blinder says. “And if they don’t produce, they don’t hire workers. And if they don’t hire workers, the workers don’t have income — and if the workers don’t have income, they can’t buy stuff.”
Keynes was, after all, an economist of crises. The economic stimulus he prescribed for an ailing economy, he made clear, was merely a short-term remedy. In the long term, he wrote, we’re all dead.
In Keynes’ seminal 1936 book, The General Theory of Employment, Interest and Money, he argued that markets do indeed fail, and that if individuals or private enterprise cannot or will not spend in the short term, then the government must, to boost employment.
Here’s the Keynes v. Hayek rap mentioned in the story:
I gave economics students extra credit for reading chapters of Keynes’s book, The General Theory of Employment, Interest and Money, or otherwise studying this material. It’s something far too few people do.
[Much of this post appeared earlier at Mr. Darrell's Pin Factory; used here with express permission.]
- John Maynard Keynes.org
- “Keynesian Economics” at The Concise Encyclopedia of Economics (this is a conservatively-biased source, though very accurate even in its bias)
- “FDR takes over,” article on FDR’s economics policies and their effects, at Millard Fillmore’s Bathtub
- “John Maynard Keynes’s hypothetical grandchildren,” The Guardian
- More on Keynes directly at Millard Fillmore’s Bathtub:
- “Fear the Boom and Bust,” a rap-off (video featuring rap duel between Keynes and Friedrich von Hayek)
- Quote of the moment: Gold standard at “barbarous relic” — Keynes
- John Maynard Keynes (economist.com)
- A Keynes for all seasons (economist.com)
- My John Maynard Keynes Lecture (delong.typepad.com)
- How to invest like… John Maynard Keynes (telegraph.co.uk)