John Maynard Keynes, Keynesian Economics, and Keynesianism Quotes

"Keynes argued in The General Theory that the free-market economy contained no built in mechanism to assure full employment. The  crucial weakness, he said, lies in the relationship between savings and investment. People tend to consume more as their incomes go up, but the increase is not as great as the increase in income. In other words, they also save a portion of their higher income. The problem, he insisted, is that saving is 'non-spending' and if people do not spend all the extra income they earn, businessmen may not have the incentive to invest enough to employ all those who want to work at prevailing wages."

Richard Ebeling
The Freeman
Foundation for Economic Education
November 2004
Library Topic

“[…] public works even of doubtful utility may pay for themselves over and over again at a time of severe unemployment, if only from the diminished cost of relief expenditure, provided that we can assume that a smaller proportion of income is saved when unemployment is greater; but they may become a more doubtful proposition as a state of full employment is approached. Furthermore, if our assumption is correct that the marginal propensity to consume falls off steadily as we approach full employment, it follows that it will become more and more troublesome to secure a further given increase of employment by further increasing investment. It should not be difficult to compile a chart of the marginal propensity to consume at each stage of a trade cycle from the statistics (if they were available) of aggregate income and aggregate investment at successive dates.”

Library Topic

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery."

John Maynard Keynes
Harcourt, Brace and Howe
1920
Library Topic

"The time has already come when each country needs a considered national policy about what size of population, whether larger or smaller than at present or the same, is most expedient. And having settled this policy, we must take steps to carry it into operation. The time may arrive a little later when the community as a whole must pay attention to the innate quality as well as to the mere numbers of its future members."

John Maynard Keynes
1926
Library Topic

"Let us clear from the ground the metaphysical or general principles upon which, from time to time, laissez-faire has been founded. It is not true that individuals possess a prescriptive ‘natural liberty’ in their economic activities. There is no ‘compact’ conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction from the principles of economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately."

John Maynard Keynes
Hogarth Press
July 1926
Library Topic

“The main task is producing first the intellectual conviction and then intellectually to devise the means. Insufficiency of cleverness, not of goodness, is the main trouble.”

John Maynard Keynes
Working Paper, No. 542
The Levy Economic Institute of Bard College
August 2008
Library Topic

“Crude, old-style Keynesianism has thus returned with a vengeance. In truth, it never really left. Despite all the talk by government policymakers and central bankers and their macroeconomic advisers that they have painstakingly developed and learned to deploy sophisticated new tools of ‘stabilization policy’ in the last twenty-five years, their tool shed is, in actual practice, completely bare of all but the blunt and well-worn instruments of deficit spending and cheap money.”

F. A. Hayek
The Institute of Economic Affairs and the Ludwig von Mises Institute
1972
Library Topic
Library Topic: Market Failure

“The whole of the labor of the unemployed is available to increase the national wealth. It is crazy to believe that we shall ruin ourselves financially by trying to find means for using it and that safety lies in continuing to maintain idleness.”

John Maynard Keynes
Working Paper, No. 542
The Levy Economic Institute of Bard College
August 2008
Library Topic

"Rather than demand that workers accept lower pay, Keynes favored raising the general level of prices so employers could make profits without cutting wages. In other words, Keynes’s solution to unemployment was price inflation."

Richard Ebeling
The Freeman
Foundation for Economic Education
November 2004
Library Topic

"For the past 30 years, we’ve been told that government spending is bad, and conservative opposition to fiscal stimulus (which might make people think better of government) has been bitter and unrelenting even in the face of the worst slump since the Great Depression. Predictably, then, Republicans — and some Democrats — have treated any bad news as evidence of failure, rather than as a reason to make the policy stronger."

Paul Krugman
The New York Times
July 9, 2009
Library Topic

"The standard explanation of the Great Depression, found in most American high-school history texts, is that it was created by the wild and irrational stock-market speculation that ultimately led to the Great Crash of October 1929. Investor speculations were so excessive—so the story goes—that once the bubble popped, it triggered the most severe decline in economic activity in U.S. history. The key point of this story is that the crash and the subsequent depression were due to factors that are innate to the capitalist system, unchecked under the supposedly laissez-faire policies of Herbert Hoover. It was only once Franklin Delano Roosevelt came into office that the government jump-started the recovery. It is thus claimed that FDR’s policies were responsible not only for the recovery, but in fact for “saving capitalism from itself” when many Americans were willing to consider adopting full-blown socialism in the 1930s as a way to deal with the downturn.

Most people do not realize how much of this explanation had been shaped by Keynesian economics, the dominant economic paradigm from the 1940s to the 1970s."

Ivan Pongracic Jr.
The Freeman, Vol. 57, Issue 7
Foundation for Economic Education
September 2007
Library Topic

“Unfortunately, Keynes is all the rage now. […] Today’s politicians, from George Bush to Barack Obama, have suddenly become Keynesians during this financial crisis, spending money they don’t have in a vain effort to right the ship.  Even Newsweek has gone so far to say, ‘We are all socialists now.’  Alan Greenspan, the ex-student of Ayn Rand, now favors nationalization of the big American banks Citibank and Bank of America.

Every investor and gold bug should know the enemy: Keynes, the advocate of big government and the welfare state, and Karl Marx, the radical who advocated outright state socialism and total central control of the means of production.”

Mark Skousen
Adam Smith Institute
February 27, 2009
Library Topic

“If you buy a power mower strictly to use on your own lawn, it is doubtless part of your ‘propensity to consume.’ If you buy it to rent out to others, it is an ‘investment.’ But what is it if you use it partly for your own lawn and partly to rent out to others?

Such questions are enough to show that the line between ‘consumption goods’ and ‘capital goods,’ between ‘consumption’ and ‘investment,’ is not as clear and sharp as Keynes's elaborate theoretical division implies.”

Henry Hazlitt
D. Van Nostrand Company Inc.
1959
Library Topic

"Commentators who tout the glories of stimulus packages and bemoan the difficulty that small and large businesses and consumers have been having in finding credit never seem to make the causal connection that government borrowing can dry up, and has dried up, credit for nongovernmental purposes. Why should banks loan their available funds to people for risky private projects when they can loan their funds at little risk to the government, with 300-million-plus Americans it can tax to cover the debt."

Richard B. McKenzie
The Freeman, Volume 10, Issue 8
Foundation for Economic Education
October 2010
Library Topic

"The doctrine of an inverse relationship between inflation and unemployment is a crude generalization of fictitious interaction between inflation and unemployment. It denies basic economic principles, obscures economic knowledge, and contradicts economic reality. Many Keynesians themselves are beginning to wonder whether the Phillips curve really exists."

Hans F. Sennholz
The Freeman, Volume 36, Issue 6
Foundation for Economic Education
June 1986
Library Topic

"The new classical revolution of the 1970s left an indelible mark on the way macroeconomists of all stripes think about the economy, just as the Keynesian revolution of the 1930s did before it. New Keynesian economics is far different from old Keynesian economics - so different, in fact, that today the label "Keynesian' may generate more confusion than understanding. With new Keynesians looking so much like old classicals, perhaps we should conclude that the term 'Keynesian' has out-lived its usefulness. Perhaps we need a new label to desribe the school of macroeconomics that accepts the existence of involuntary unemployment, monetary non-neutrality, and sticky wages and prices. Until a new label is found, however, we can safely say that Keynesian economics is alive and well."

N. Gregory Mankiw
NBER Working Paper Series, No. 3885
National Bureau of Economic Research
October 1991
Library Topic

"A regime of permanent budget deficits, inflation, and an increasing public-sector share of national income—these seem to us to be the consequences of the application of Keynesian precepts in American democracy. Increasingly, these consequences are coming to be recognized as signals of disease rather than of the robust health that Keynesianism seemed to offer."

James M. Buchanan
Richard E. Wagner
Liberty Fund
1977
Library Topic

"The political version of Keynesianism is a one-sided theory, with almost total emphasis on what the federal government spends. It pays virtually no attention to the potential private-sector offsets to the greater deficit spending by government or to how current fiscal policies could have negative long-run real income effects that can feed the current generation’s expectations of impaired futures. Keynesianism, in the form practiced in political circles, has no appreciation for how people’s expectations can affect their current spending and investing plans."

Richard B. McKenzie
The Freeman, Volume 10, Issue 8
Foundation for Economic Education
October 2010
Library Topic

"Classical liberalism and the economics of the classical economists had been founded on two insights about man and society. First, that there is an invariant quality to human nature that makes him what he is; and if society is to be harmonious, peaceful, and prosperous, men must reform their social institutions in a way that sees to it that the inevitable self-interests of individual men are directed into those avenues of action that benefit not only themselves but others in society as well. They therefore advocated the institutions of private property, voluntary exchange, and open, peaceful competition. Then, as Adam Smith had concisely expressed it, men would live in a system of natural liberty in which each individual would be free to pursue his own ends but would be guided as if by an invisible hand to serve the interests of others in society as the means to his own self-improvement. The second insight was that it is insufficient in any judgment concerning the desirability of a social or economic policy to focus only upon its seemingly short-run benefits. The laws of the market always bring about certain inevitable effects in the long run from any shift in supply and demand or from any intervention by the government in the market order. Thus, as the French economist Frédéric Bastiat had emphasized, it behooves us to always try to determine not merely 'what is seen' from a government policy in the short run but also to discern as best we can 'what is unseen,' i.e., the longer-run consequences from our actions and policies.

...

Keynes's assumptions deny the wisdom and the insights of the classical liberals and the classical economists. The biased emphasis is towards the benefits and pleasures of the moment, the short run, with an almost total disregard of the consequences that will only be fully felt tomorrow. It led F.A. Hayek in 1941 to refer to Keynes's short-run myopia "as a betrayal of the main duty of the economist and a grave menace to our civilization."

Richard M. Ebeling
The Future of Freedom Foundation
August 1998
Library Topic

"So often in the past ten years I have had to prophesy evil. But now a great weight is lifted from us, a great tension relieved. There is no danger of the exchange falling too far; there is no danger of a serious rise in the cost of living. The worst I should expect would be a return to the prices of some two years ago. But meanwhile British trade will have received an enormous stimulus, much more than most others have yet realized."

John Maynard Keynes
British Movietone
1931
Library Topic
Library Topic: The Gold Standard

"Think about World War II, right? That was actually negative social product spending, and yet it brought us out.

I mean, probably because you want to put these things together, if we say, 'Look, we could use some inflation.' Ken [Rogoff] and I are both saying that, which is, of course, anathema to a lot of people in Washington but is, in fact, what the basic logic says.

It's very hard to get inflation in a depressed economy. But if you had a program of government spending plus an expansionary policy by the Fed, you could get that. So, if you think about using all of these things together, you could accomplish, you know, a great deal.

If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better –

...there was a 'Twilight Zone' episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time, we don't need it, we need it in order to get some fiscal stimulus."

Paul Krugman
Fareed Zakaria GPS
CNN
August 14, 2011
Library Topic
Library Topic

More About This Topic...

Click thumbnails below to view links

Quote Page

Commentary or Blog Post

"As January 20 nears, Barack Obama's ambitions for spending on the likes of roads, bridges and jobless benefits keep growing. The latest leak puts the 'stimulus' at $1 trillion over a couple of years, and the political class is embracing it as a miracle cure.

Not to spoil the party, but this is not a new idea. Keynesian 'pump-...

This short piece and corresponding graph illustrate the effectiveness of Keynesian economic theory during the recent economic downturn. Chris Edwards offers a simple math formula to further drive home the message: "Biggest Keynesian Stimulus + Slowest Recovery = Time to Rethink Keynesian Theory."

"The eclipse of Keynesian economics proceeds. When Keynes wrote 'The General Theory of Employment, Interest and Money' in the mid-1930s, governments in most wealthy nations were relatively small and their debts modest. Deficit spending and pump priming were plausible responses to economic slumps. Now, huge governments are often saddled with massive debts. Standard Keynesian remedies for...

"A professor of economics at Harvard University from 1983-1991, Lawrence Summers served as chief economist of the World Bank and secretary of the Treasury before returning to Harvard University as its president in 2001.

In this interview, Summers discusses the battle of ideas, globalization and its backlash, the Asian financial...

"Both Marx and Hobson believed that the principal cause of depression was the insufficient ability of capitalists to find sufficient investment opportunities to offset increased savings generated by economic growth. Keynes uniquely contributed to this view by showing how the relation of savings to income could lead to a stable economy but with a depressed level of...

"As extended unemployment swells almost everywhere across the advanced industrial world, that question is turning into a lightning rod for governments.

For years, Denmark was held out as a model to countries with high unemployment and as a progressive touchstone to liberals in the United States. The Danes, despite their lavish...

"According to Keynesian economists, government hiring stimulates the private sector during a recession because government employees go out and spend much of their paychecks in the private sector, and extra demand is exactly what the private sector needs during a recession. But this year’s experience with census hiring contradicts that view."

"The British economist John Maynard Keynes may live on in popular legend as the world’s most influential economist. But in much of Europe, and most acutely here in the land of his birth, his view that deficit spending by governments is crucial to avoiding a long recession has lately been willfully ignored."

In this week’s chart, Mercatus Center Research Fellow Matthew Mitchell uses data from the Bureau of Economic Analysis to illustrate the increase in the size of federal, state, and local expenditures as a share of GDP over the course of the past century.

"We are all Keynesians now. Even the right in the United States has joined the Keynesian camp with unbridled enthusiasm and on a scale that at one time would have been truly unimaginable.

For those of us who always claimed some connection to the Keynesian tradition, this is a moment of triumph, after having been left in the...

"Some readers ask whether Keynes believed that the government should always run deficits — and whether I believe that too. The answer is no on both counts."

"The problem today is Keynesian-style policy, the darling of the establishment politicos and media giants: big government solutions, deficit spending, easy money, bailouts.  Keynes has suddenly trumped Adam Smith.  And that's dangerous."

"The New Deal dam project that professor Malamud is so proud of provided a few thousand jobs 80 years ago, but has spurred migration, farming, and development that is likely unsustainable and may ultimately be the biggest malinvestment in history."

"Within the context of income-expenditure analysis, it is appropriate to think of Friedman's Monetarism as being directly opposed to Keynesianism. Although both Keynesianism and Monetarists accept the same high level of aggregation, one which closes off issues believed by the Austrians to be among the most important, they have sharp disagreements about the nature...

"So influential was John Maynard Keynes in the middle third of the twentieth century that an entire school of modern thought bears his name. Many of his ideas were revolutionary; almost all were controversial. Keynesian Economics serves as a sort of yardstick that can define virtually all economists who came after him."

"The late revered British economist John Maynard Keynes, whose 1936 treatise, The General Theory of Employment, Interest, and Money, changed the way many economists think about recessions, once wrote that 'in the long run we’re all dead.' Well...

"For a while, there has been a strain of center-left American commentary that has viewed China's leaders as some kind of technocratic super-geniuses who have done a much better job of guiding their society than the loons and hacks who would actually, you know, be voted for. Call this the Tom Friedman school of thought.

In reality, China's leaders have a tendency to fall for a lot of the...

This piece explains President Obama's Keynesian nature and describes some of the confusion this causes with his ancestry connections. Yadron attempts to clarify that Obama's economic ideas (i.e. Keynesian) are vastly different from his relation to the...

"[Martin Wolf] thinks the Republicans' 'de facto Keynesianism' puts the Democrats at a historic disadvantage, as it's almost impossible to run against a party that constantly promises everyone a free lunch and blames the other guys when the check arrives. He thinks the situation could become disastrous if a Republican win leads to long-term policies so fiscally irresponsible as to flirt...

"This week, Senior Research Fellow Veronique de Rugy gives an updated version of stimulus spending and unemployment based on the most recent data from the Bureau of Labor Statistics and the Center for Data Analysis. The administration’s promise that the ARRA bill would keep unemployment rates from breeching 8.8 percent and would create some 3 million jobs—90 percent of which would be in the...

Kates discusses Federal Reserve Chairman Alan Greenspan's fondness of Keynes, the failure of most public discussions to understand that tax cuts and public spending are not merely ways to stimulate the economy, the Japanese experience with Keynesian economics, and the reality that Keynes' ideas dominate most economic thinking so far in the...

"The Great Depression created a widespread misconception that market economies are inherently unstable and must be managed by the government to avoid large macreconomic fluctuations, that is, business cycles. This view persists to this day despite the more than 40 years since Milton Friedman and Anna Jacobson Schwartz showed convincingly that the Federal Reserve’s...

"As soon as the Obama administration-in-waiting announced its stimulus plan — this was before Inauguration Day — some of us worried that the plan would prove inadequate. And we also worried that it might be hard, as a political matter, to come back for another round.

Unfortunately, those worries have proved justified. The bad...

"More than three decades have passed since Richard Nixon, the Republican US president, declared: 'We are all Keynesians now.'

The phrase rings truer today than at any time since, as governments seize on John Maynard Keynes’s idea that fiscal stimulus – public spending and tax cuts – can help dig their economies out of recession...

Chart or Graph

Japan's economy grow anemically over that decade, but as the nearby chart shows, its national debt exploded.

In their responses to the financial crisis and recession, many countries have adopted policies that limit economic freedom. The negative effect of these policies on future growth rates is predictable and certain, and it is already beginning to be manifest in the data and in countries’ Index of Economic Freedom scores.

[This figure] reports the impact of government spending increases implied by the American Recovery and Reinvestment Act in our model with rule-of-thumb consumers compared to the impact in the Smets-Wouters model previously shown in Figure 2.

It is clear from Figure 1 that the results are vastly different between the different models. Perhaps the most important difference is that in one case higher government spending keeps on adding to GDP 'as far as the eye can see,' while in the other case the effect on GDP diminishes as non-government components are crowded out by government spending.

[The figure] presents the results of the simulation. The bar graph shows the increased government purchases as a share of GDP, and the line graph shows the impact of the increase in purchases on real GDP according to the Smets-Wouters model.

This chart and its corresponding article discusses the Keynesian-minded stimulus spending mainly enacted during the Obama administration.

The chart shows how expenditures as a share of GDP spiked during World War II but were reduced rapidly and significantly. However, spending never returned to the pre-war level and has followed a general upward trend ever since.

The unemployment rate started at 7.6 percent when President Obama took office and peaked at 10.2 percent in October of 2009. Since the enactment of the American Recovery and Reinvestment Act (ARRA) in February 2009, unemployment has not approached pre-ARRA unemployment rates again.

"Another update to the chart used by the Obama administration to promote its stimulus package. (Real figures charted as red dots.) Professor Steve Horwitz says that it's time to call it a failure. It's hard to disagree. Even on its own terms, the stimulus has not delivered the jobs promised. In fact, the situation is worse than the projection of unemployment without the recovery plan.

...

Analysis Report White Paper

The predominant, Keynesian, view of the effects of fiscal policy that was embedded in the large scale macroeconometric models of the seventies and eighties has come under attack.

"Both New Classical and New Keynesian macroeconomic theorists misunderstand and distort old Keynesian economics, alleging that its diagnoses and prescriptions depend on the indefensible assumption that money wages and prices are 'rigid.'"

"International financial crises…have led to perennial fiscal adjustment. Alternatives to the permanent fiscal adjustment, the main legacy of the Washington Consensus, from a Post Keynesian perspective, are presented. It is emphasized that the notion of the euthanasia of the rentier is a necessary complement to the socialization of investment."

We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of 2009. We extend the benchmark Smets-Wouters (Smets and Wouters, 2007) New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary taxation.

Ebeling, president of the Foundation for Economic Education, gives a brief introduction to the fundamental history and beliefs behind Keynesian economics. He then presents Henry Hazlitt's critiques of Keynes' ideas on economics.

"The doctrine of an inverse relationship between inflation and unemployment is a crude generalization of fictitious interaction between inflation and unemployment. It denies basic economic principles, obscures economic knowledge, and contradicts economic reality. Many Keynesians themselves are beginning to wonder whether the Phillips curve really exists."

"There is considerable evidence to argue that Keynes had an 'on the spot' approach to full employment, where the problem of unemployment is solved via direct job creation, irrespective of the phase of the business cycle."

"Keynesian economics is a theory of total spending in the economy (called aggregate demand) and its effects on output and inflation. Although the term has been used (and abused) to describe many things over the years, six principal tenets seem central to Keynesianism. The first three describe how the economy works."

Ebeling discusses how Keynes' ideas require the destruction of economic liberties in order to be implemented by central planners. He then goes on to discuss how such ideas differ from classical liberal views on human nature and government.

"The Keynesian stimulus theory fails for the simple reason that it is only half a theory. It correctly describes how deficit spending can raise the level of demand in part of the economy, and ignores how government borrowing to finance deficit spending automatically reduces demand elsewhere."

"Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust."

"In the present article, we'll review Bastiat's original lesson and apply it to modern-day disputes over the possible benefits of destructive events."

"A growing government is contrary to America’s economic interests because the various methods of financing government—taxes, borrowing, and printing money—have harmful effects. This is also true because government spending by its very nature is often economically destructive, regardless of how it is financed."

"This paper discusses the reemergence of Keynesian economics during the past decade. It highlights the substantial differences between new Keynesian economics and the convictions of early Keynesians. In particular, it points out that new Keynesians have adopted many views that were once considered 'monetarist' or 'classical.'"

Can deliberate government spending activities have a continuing net positive impact on economic activity? Do federal spending programs designed to offset a recession’s negative effects really add a net positive nudge to GDP growth? Can government purposefully and successfully stimulate ongoing employment growth?

Henderson explains the economic components that led to the booming postwar years and declares that times of prosperity like that can be achieved by "dramatically reducing government spending and deregulating an economy."

Tax cuts can deepen a recession if the short-term nominal interest rate is zero, according to a standard New Keynesian business cycle model. An example of a contractionary tax cut is a reduction in taxes on wages. This tax cut deepens a recession because it increases deflationary pressures.

"When conventional economic wisdom repeatedly fails, it becomes necessary to revisit that conventional wisdom. Government spending fails to stimulate economic growth because every dollar Congress 'injects' into the economy must first be taxed or borrowed out of the economy."

Video/Podcast/Media

"Greg Mankiw of Harvard University and Greg Mankiw's Blog talks about the state of modern macroeconomics and Keynes vs. the Chicago School. He defends his proposal to raise gasoline taxes and discusses the politics of tax policy."

"Ricardo Reis of Columbia University talks with EconTalk host Russ Roberts about Keynesian economics in the classroom and in research. Reis argues that Keynesian models are a useful framework for helping undergraduates understand macroeconomic ideas of general equilibrium. More generally, Reis argues, Keynesian ideas remain influential in macroeconomic research,...

"Steve Fazzari, of Washington University in St. Louis, talks with EconTalk host Russ Roberts about Keynesian economics. Fazzari talks about the paradox of thrift, makes the case for a government stimulus plan, and weighs the empirical evidence for a Keynesian worldview."

"Econstories.tv is a place to learn about the economic way of thinking through the eyes of creative director John Papola and creative economist Russ Roberts.

In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the...

The video discusses the battle over economic philosophy and policy prescriptions throughout the 20th century, especially focusing on the ideas of Hayek, Keynes, and Marx.

"Richard Epstein and John Taylor reflect on the global economic crisis of 2008 and discuss why the Keynesian narrative of events fails to identify and explain the causes at the root of the crisis. Epstein and Taylor evaluate the government responses to the crisis, assessing the effectiveness of TARP and President Obama's stimulus legislation. Finally, Epstein and...

"'Fight of the Century' is the new economics hip-hop music video by John Papola and Russ Roberts at http://EconStories.tv."

"Mr. Skidelsky talked about his book John Maynard Keynes: Fighting for Freedom, 1937-1946 published by Viking. The book examines Keynes's economic theories and his impact on British efforts to win World War II and his lasting influence on post-war politics." Skidelsky gives a fascinating account of Keynes' life and also discusses the difference between the...

In this video, economist John Maynard Keynes predicts that the British suspension of the Gold Standard will have positive results for the economy.

BBC Radio 4 will be recording a debate between modern day followers of Keynes and Hayek.

"Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance."

Kenneth Rogoff advocates for some more inflation to curb the effects of the recession and get back onto the path toward economic growth.

"Roger Garrison spoke to students attending Advanced Austrian Economics about macroeconomics and differing approaches of John Maynard Keynes and F.A. Hayek."

"So Krugman says wars are good for the economy? I guess wars are only good if we are fighting UFO's from the 'Twilight Zone' and a liberal is Commander in Chief."

"Robert Skidelsky and Nicholas Phillipson discuss how the philosophies of Keynes and Smith helped shape their influential economic ideas and examine how each has influenced social and political change."

Primary Document

"Concluding his most important book with those words in 1935, John Maynard Keynes was confident that he had laid down a philosophy that would move and change men's affairs. Today, some 20 years after his death, his theories are a prime influence on the world's free economies, especially on America's, the richest and most expansionist. In Washington the men who...

"In this book, Hayek provides an incisive critique of this fallacy in its Keynesian form and demonstrates the dire consequences of pursuing policies based on it. But the book contains much more than a critique of fallacious theories and policies: it holds the recipe for a solid and steady recovery from our current depression (and yes, always the straight-talker,...

Robinson was a follower of Keynes. In this book she discusses Marxism:

"But though Marx is more sympathetic, in many ways, to a modern mind, than the orthodox economists, there is no need to turn him, as many seek to do, into an inspired prophet. He regarded himself as a serious thinker, and it is as a serious thinker that I have...

"Vol. 8 of The Collected Works. Democracy in Deficit is one of the early comprehensive attempts to apply the basic principles of public-choice analysis to macroeconomic theory and policy. The book serves to bolster Buchanan’s central beliefs in the necessity of a balanced-budget amendment to the U.S. Constitution and in monetary rules rather than central...

"John Maynard Keynes, the man—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was...

Essay embedded below.

About this volume of Hayek's collected works:

In 1931, when the young F. A. Hayek challenged the economic theories of John Maynard Keynes, sixteen years his senior, and one of the world's leading economists, he sparked a spirited debate that would influence economic policy in democratic countries for decades....

"John Maynard Keynes, late economic adviser to the British Government, is the new prophet of inflationism. The 'Keynesian Revolution' consisted in the fact that he openly espoused the doctrines of Silvio Gesell. As the foremost of the British Gesellians, Lord Keynes adopted also the peculiar messianic jargon of inflationist literature and introduced it into...

Hazlitt edited this 1960 volume of early reactions to Keynes at a time when most economists were devout Keynesians. For the most part, this book is a collection of writings by Keynes' earliest critics.

"The writer of this book was temporarily attached to the British Treasury during the war and was their official representative at the Paris Peace Conference up to June 7, 1919; he also sat as deputy for the Chancellor of the Exchequer on the Supreme Economic Council. He resigned from these positions when it became evident that hope could no longer be entertained of...

"This essay, which was published as a pamphlet by the Hogarth Press in July 1926, was based on the Sidney Ball Lecture given by Keynes at Oxford in November 1924 and on a lecture given by him at the University of Berlin in June 1926.

This essay is worth reading for especially two reasons. First of all, for the wealth of historical information about the origin of the laissez-faire...

In this famous book, Hazlitt tackles Keynes' General Theory piece by piece.

"Yet about the General Theory there is a strange paradox. The Keynesian literature has perhaps grown to hundreds of books and thousands of articles. There are books wholly devoted to expounding the General Theory in simpler and more intelligible terms. But on the critical side there is a great dearth. The non-Keynesians and anti-Keynesians have contented themselves...

I have called this book the General Theory of Employment, Interest and Money, placing the emphasis on the prefix general.

"'A camel,' it has been said, 'is a horse designed by a committee.' This might sound like a telling example of the terrible deficiencies of committee decisions, but it is really much too mild an indictment. A camel may not have the speed of a horse, but it is a very useful and harmonious animal—well coordinated to travel long distances without food and water. A...

"W.H. Hutt’s Theory of Idle Resources was first published in 1939, surely one of the earliest responses to Keynes’s General Theory.

Hutt goes for the heart of Keynes’s prescription for recovery, which was to get idle resources moving, whether that is money, capital, or labor. If something isn’t being employed right now, it is being wasted.

Hutt responded at length that there is...

Books

Link