A quote from Keynes
I had occasion during a recent thread on this blog to quote from John Maynard Keynes in response to Paul Newman from Islington, whose blog Islington Newmania I can recommend here.
Obviously I do not share Keynes' political views - he was a Liberal. And the "neo Keynsian" system of economics which is associated with him, though in fact it was mainly the work of an economist called Hicks, had some success in the 1950's and early 60's but ceased to work effectively after that.
Of course, Keynes' work influenced many economists other than just the neo-Keynsians - no less a monetarist than Professor Milton Friedman once said "We are all Keynesians now."
Two ideas of Keynes in particular will last longer than any particular system of economic thought. His famous saying that "in the long run we are all dead" will undoubtedly be remembered, mostly by those who forget the context.
He also wrote a brilliant passage at the end of his book, "The General Theory of Employment, Interest, and Money" about how ideas can live on and influence people long after the people who inspired those ideas are dead and after the circumstances which gave rise to their opinions have ceased to be relevant. One great irony is that this happened to some of his own ideas, and to observations he made which were true in his lifetime but no longer are. But the passage from his "General Theory" deserves to be better known: here it is.
"The ideas of economists and of political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so tha the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."
Obviously I do not share Keynes' political views - he was a Liberal. And the "neo Keynsian" system of economics which is associated with him, though in fact it was mainly the work of an economist called Hicks, had some success in the 1950's and early 60's but ceased to work effectively after that.
Of course, Keynes' work influenced many economists other than just the neo-Keynsians - no less a monetarist than Professor Milton Friedman once said "We are all Keynesians now."
Two ideas of Keynes in particular will last longer than any particular system of economic thought. His famous saying that "in the long run we are all dead" will undoubtedly be remembered, mostly by those who forget the context.
He also wrote a brilliant passage at the end of his book, "The General Theory of Employment, Interest, and Money" about how ideas can live on and influence people long after the people who inspired those ideas are dead and after the circumstances which gave rise to their opinions have ceased to be relevant. One great irony is that this happened to some of his own ideas, and to observations he made which were true in his lifetime but no longer are. But the passage from his "General Theory" deserves to be better known: here it is.
"The ideas of economists and of political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so tha the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."
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