Keynes and Hayek

Submitted by Sigmund Derman (United States), Sep 17, 2018 at 00:59

"Were not his [Keynes'] gymnastics nothing but socialism by slow sweet poison?"--actually, no they were not. Keynes made many contributions to economics. He came up with important quantitative insights relating levels of expenditures, particularly by the government, aggregate demand, inflation, and levels of employment. Though the upshot of this work indicates that totally laissez faire economics is probably not the best idea, it is far from socialism. As the great conservative economist Milton Friedman was fond of saying "We are all Keynesians now." Likewise, even most liberal economists accept Friedman's major ideas on monetary policy. Fortunately there is a large core of modern economics that is strongly rooted in quantitative analysis rather than political theory. There is also a newer less quantitative side of it that is based on psychological and neurological analysis of behavior. Of course, economists also have many political individual political biases but it is wrong to equate Keynes' ideas with socialism.

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