In the previous posts where we looked at the willful misunderstanding of some with Keynes-a la Sumner-and Clark Johnson's discussion of Keynes' understanding of the monetary system-particularly the wide criticism that Keynes was too pessimistic about the efficacy of monetary policy and was too narrowly focused on interest rate policy as the level of monetary policy it got me to thinking.
The idea that Keynes was ignorant of monetary policy is quite clearly false which is clear from reading his earlier Tract for Monetary Reform and Treatise on Money. However, it's worth considering that Keynes after all was the architect of what remains our most successful international monetary system yet.
Sumner himself admitted Bretton Woods was superior to our current system. I asked him why once and he said 'Four reasons-2008, 2009, 2010, 2011."
There has been a good deal of talk about the "Return of the Master" as Skidelsky puts it in his recent Keynes' book. However it's actually in current Europe where he'd be most welcome. It's clear that the way the euro has been run it totally wrongheaded and Keynes would definitely be deeply critical for a surplus country like Germany putting all the burden of readjustment on deficit countries like Greece.
He would no doubt counsel that at least part of what would need to happen was deliberate inflation in Germany.
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