I couldn't agree with him more here.
Incidentally, although reviled by most modern conservatives, Keynes was himself rather conservative.
"...Keynes' efforts were motivated by a strong desire to maintain the liberal capitalist order. Honest conservatives have always understood this. In 1945, economist David McCord Wright noted that a conservative political candidate could easily run a campaign "largely on quotations from The General Theory." The following year, economist Gottfried Haberler, of the conservative Austrian school, conceded that the specific policy recommendations of Keynesian economics were not at all revolutionary. "They are in fact very conservative," he admitted.
"Peter Drucker, a conservative admirer of Keynes, viewed him as not merely conservative, but ultraconservative. "He had two basic motivations," Drucker explained in a 1991 interview with Forbes. "One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than [economist F.A.] Hayek!"
"John Kenneth Galbraith, whose politics were well to the left of Keynes, not to mention Drucker, agreed with this assessment. "The broad thrust of his efforts, like that of Roosevelt, was conservative; it was to endure that the system would survive," he wrote. But, Galbraith added, "Such conservatism in the English-speaking countries does not appeal to the truly committed conservative."...
http://www.forbes.com/2009/08/13/john-maynard-keynes-conservative-opinions-columnists-bruce-bartlett.html
Incidentally, although reviled by most modern conservatives, Keynes was himself rather conservative.
"...Keynes' efforts were motivated by a strong desire to maintain the liberal capitalist order. Honest conservatives have always understood this. In 1945, economist David McCord Wright noted that a conservative political candidate could easily run a campaign "largely on quotations from The General Theory." The following year, economist Gottfried Haberler, of the conservative Austrian school, conceded that the specific policy recommendations of Keynesian economics were not at all revolutionary. "They are in fact very conservative," he admitted.
"Peter Drucker, a conservative admirer of Keynes, viewed him as not merely conservative, but ultraconservative. "He had two basic motivations," Drucker explained in a 1991 interview with Forbes. "One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than [economist F.A.] Hayek!"
"John Kenneth Galbraith, whose politics were well to the left of Keynes, not to mention Drucker, agreed with this assessment. "The broad thrust of his efforts, like that of Roosevelt, was conservative; it was to endure that the system would survive," he wrote. But, Galbraith added, "Such conservatism in the English-speaking countries does not appeal to the truly committed conservative."...
http://www.forbes.com/2009/08/13/john-maynard-keynes-conservative-opinions-columnists-bruce-bartlett.html
Uh, yes. I mean there's nothing to add but Amen! However, listen to Bartlett:
"Conservatives continue to decry the $787 billion stimulus package enacted in February. At best, they think it accomplished nothing because the additional federal borrowing took as much out of the economy as the stimulus put in. At worst, the deficits and enlargement of government will lead to slower growth and inflation not too far down the road.
"Those on the right have been making this same argument ever since British economist John Maynard Keynes popularized the idea of using budget deficits to stimulate growth in his 1936 book, The General Theory of Employment, Interest and Money. For this reason, Keynes, even more so than Karl Marx, is the principal bête noire of free market economists. They believe governments should never do anything to counteract economic downturns. Consequently, they must implicitly believe that all recessions are the result of massive and simultaneous failures by private businesses and workers who must therefore bear all the costs of adjustment. By opposing government intervention, free market economists are saying that it either made no mistakes or should do nothing to fix those it may have made."
http://www.forbes.com/2009/08/13/john-maynard-keynes-conservative-opinions-columnists-bruce-bartlett.html
What is is that any of these conservatives say that Sumner disagrees with? He even took the side of Lucas and Cochrane back in 2010.
http://diaryofarepublicanhater.blogspot.com/2012/01/scott-sumner-becomes-even-more-shrill.html
Bartlett again:
"What Keynes understood is that governments bear primary responsibility for recessions. In really severe downturns, such as we suffered in the 1930s and are suffering today, government action is essential to turn the economy around; the private sector simply can’t do it on its own. He also understood that democratic societies cannot long tolerate high levels of unemployment. At some point, people will jettison capitalism for some sort of socialism, which would threaten democracy as well."
Does Sumner agree with this? Nope. He agrees with Ed Prescott and friends that fiscal policy won't work because of 'crowding out' and RE and because of a 'negative multiplier.' What I seem to be getting from Sumner's defenders-Tom and Mark, et. al-is that somehow I take this whole monetary offset much more seriously than is necessary. Scott's mostly just joking here-can't I take a joke. Why then does he spend so much time on it?
The fact that Keynes called himself a conservative (or was a conservative according to other objective analysis) is irrelevant. Whats relevant is what ideas he espoused and how he suggested achieving them.
ReplyDeleteJust about everyone in any position of influence throughout history was "conservative" I would argue. They are all trying to protect the status quo..... and Im not using this negatively. I think much of the status quo is worth preserving. I like much of what we have accomplished. I am conservative in regards to many things
There is an ancillary question it seems to me; How did we accomplish what it is that we find good? I would argue that what we have done in our great accomplishments is be less worried about our "selves" and put our efforts to something bigger..... which is an idea completely antithetical to modern conservatism. Keynes would NOT be a modern American conservative, which is all that matters now.
Keynes was also gay.
Bruce Bartlett:
ReplyDelete"What Keynes understood is that governments bear primary responsibility for recessions. In really severe downturns, such as we suffered in the 1930s and are suffering today, government action is essential to turn the economy around; the private sector simply can’t do it on its own. He also understood that democratic societies cannot long tolerate high levels of unemployment. At some point, people will jettison capitalism for some sort of socialism, which would threaten democracy as well."
Mike Sax:
"Does Sumner agree with this? Nope."
Aren't central banks government establishments? And hasn't Sumner repeatedly argued that permitting NGDP shortfalls to persist will lead to poor macroeconomic policy choices, and to poor public policy choices more generally?
Well, that's kind of a quibble. I guess I have to cross my ts and dot my i's or you'll call gotcha.
DeleteFine, Keynes' idea of the government certainly included the fiscal authority. Does Sumner's? We know that Keynes did not believe monetary policy by itself was adequate for the job.