He is an odious skunk, once described as a poseur, I think by Paul Krugman.

As a gay man with no intention of breeding, I have been informed by some with, what might be called bigoted worldviews, that I ‘serve no purpose’ and that I might as well kill myself now and save the oxygen, or become ex-gay natch.
Luckily I don’t think there’s going to be a purge of the ‘useless eaters’ anytime soon. Well, one that includes gays as one of the ‘useless eaters’ (for being gay) anyway.

Speaking as a childless person, I guess I shouldn’t have trained as a children’s nurse, since I clearly don’t care about the next generation.

I sense Ferguson’s career might now follow that of Mel Gibson’s quiet circulation of life’s plughole.

Much of the baby boomer generation have treated the long run as if they didn’t have a stake in it, but much of the baby boomer generation were heterosexual had children. So as well as being homophobic this chaps comments have no logic to them.

Ferguson is indeed a bit of a loon at times.

” Of course, it’s ecnomically nonsensical too since Keynesian favours reducing debt when the economy is doing well rather than being in a recession.”

And don’t we all wish Broon had done that rather than letting rip from 2001 to 2007.

BTW, it’s not actually “reducing debt” which is the Keynesian point at all. Rather, it’s that when there’s a lack of aggregate demand then that should be remedied by stimulus. When we’re in a boom, which is equated with excessive demand, then demand should be reduced by fiscal austerity. That such austerity also pays own debt is nice, but isn’t the point at all.

And yes, Ferguson is indeed often a loon.

Slightly different question. Does anyone know why Keynes didn’t have children? Yes, I know that before he married he most certainly did have a number of gay adventures (rent boys and the like). I simply don’t know whether it was by choice or whether either he and or his wife were unable to have them.

Does anyone actually know? It’s not important, obviously, but is interesting, at least to me.

“I simply don’t know whether it was by choice or whether either he and or his wife were unable to have them.”

Children that is, obviously, not rent boys.

Is Ferguson trying to take the mantle of Ignatieff who was, IIRC, described as a “savant idiot” – as opposed to an idiot savant.

I am a Keyesian with babies and not gay. And I know gays who are not Keynesian. How about that?

It’s not completely barking and it sounds like he was taking the mickey.

An Unqualified Apology http://www.niallferguson.com/blog/an-unqualified-apology

@ DtP It is completely and utterly barking, and if he was taking the mickey, why is he issuing an unqualified apology?

@DtP If he was taking the mickey, why has he issued an unqualified apology? I’d venture because what he said was entirely barking.

This was doubly stupid. First, it is obvious that people who do not have children also care about future generations. Second, I had forgotten that Keynes’s wife Lydia miscarried.

@6 It might be that Niall’s apology has satisfied your curiosity

@ TW (6&7): I don’t think anyone really knows why they didn’t have children. They both seem to have wanted them, and they seem to have had a full sexual relationship (some of her letters to him are remarkably explicit to a modern ear). There’s a consensus that she had a miscarriage in 1927, and it’s been suggested that her occasional and otherwise unexplained withdrawals from public life may have been for the same reason.

Keynes’ wife famously refused to discuss their life together. But I’ll forgive anyone who can describe economists as “tiresome, no wide outloooks, no touch with life, inferiority complexes, and no great ideas”.

“They both seem to have wanted them, and they seem to have had a full sexual relationship (some of her letters to him are remarkably explicit to a modern ear). ”

I am childless from a mixture of choice (never really been worried about it) and circumstance (fell in love with a woman who had already had her children).

And it doesn’t worry me at all.

But there is, I am sure, some special circle of hell reserved for those who insult those who want children but cannot by stating that they didn’t want them.

But then Ferguson ( and please, can we all remember that “right wing” encompasses many mansions) always was pretty much a tosspot.

“Of course, it’s economically nonsensical too since Keynesian favours reducing debt when the economy is doing well rather than being in a recession”.

It does, but the problem, as any behavioural economist will tell you, is the fiscal stimulus is quickly perceived by voters as the normal, expected level of public expenditure, rather than a temporary stimulus. Consequently, when the economy starts growing, government finds it politically risky to reduce public spending to pre stimulus levels. When was the last time a politician publicly said “we’ve taken public spending back to where it was 5 years ago”, and got re-elected ? Keynes works in academic economic terms but not real political ones

He’s just reiterating a point Joseph Schumpeter made many years ago.

“but the problem, as any behavioural economist will tell you, is the fiscal stimulus is quickly perceived by voters as the normal, expected level of public expenditure, rather than a temporary stimulus.”

That potential problem was soon recognised by Kalecki (see his: Political Aspects of Full Employment (1943)) and by Abba Lerner (in: Economics of Employment (1951))

Contra-cyclical monetary policy with managed expectations along along with active regulation of financial services to allow casino banking services to go bust and to rein in bankers’s bonuses will be sufficient to smooth out most business cycles.

But, as we have seen from the slump in inter-war years and the financial crisis of 2008/10, as well as from Japan’s stagnant economy after 1992, economies can get stuck with persisting stagnation and relatively high levels of unemployment.

In those situations, as Keynes noted, monetary policy is more effective in reining back a growing economy than in boosting a depressed economy, possibly with the additional handicap of a deflationary price spiral. Keynes’s General Theory was an attempt to explain how economies could get trapped in a low-level equilibrium, as this passage shows:

“..it is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable. Indeed it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse. ” (GT chp.18)
http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/contents.html

Persisting criticism of the coalition government’s austerity policy has come from the lead economics writers in the Financial Times, Britain’s leading daily business newspaper, which has a circulation larger than that of The Guardian, and from the National Institute of Economic and Social Research. These are hardly bastions of radical, heretical economics. It was, I suppose, predictable that having demonstrably lost the policy debate because of what has happened to Britain’s economy, supporters of the government would resort to puerile, personal abuse.

Note the good news today about jobs in the American economy but then the Obama administration applied a fiscal boost to the American economy in 2009 of more than $700bn as compared with £29bn proposed by Alistair Darling for Britain’s economy.

Btw note that Niall Ferguson, like George Osborne, is another Oxford history graduate, not an economics graduate.

For interest, the effective rebuttal of Ferguson’s claim that Keynes had no interest in the future because he had no children is that Keynes was a high-profile advocate of eugenics – by reports on the web, Keynes was a director of the British Eugenics Society.

The implication is that Keynes was certainly concerned about the future intellectual capabilities of Britain’s population. Another implication is that in his failure to notice this, Ferguson is a slovenly historian. The BBC is now carrying a report of a fulsome apology by Ferguson for his personal remarks about Keynes.

Nowadays, many of us regard eugenics as a reprehensible ideology but many of Keynes’s celebrated contemporaries were also active advocates of eugenics – such as HG Wells and GB Shaw, founders of both the Fabian Society and the London School of Economics.

As for invocations of Schumpter’s assessment of Keynes:

(a) in contrast to the continuing debate about keynesian economics, precious few nowadays take much interest in what Schumpeter wrote or said whereas Keynes is widely regarded as the most influential economist of the 20th century even by those who deplore that influence.

(b) for an insight into Schumpeter’s remarks about Keynes being gay, compare this assessment of Schumpeter on the web: “Not only was Schumpeter one of the ‘greats’ among economists historically, he also was an extraordinary individual — a womanizer, a bigamist, a chronic depressive, and a poseur, as well as a workaholic, a showman, and a revered teacher.”
http://blogs.berkeley.edu/2009/12/11/775/

(c) Keynes was a member of the notorious Bloomsbury group of which it has been said that virtually every member went to bed with every other member of the group at one time or another – hence Virginia Woolf had lesbian affairs and her sister, Vanessa Bell, wife to Clive Bell, had a baby by Duncan Grant, one of Keynes’s male lovers.

Rather than worry about an academic dispute and political correctness, presumed offence given to childless persons, gay people and long dead economists thousands of miles away why not concentrate upon the situation emerging this country?

For example, the Which? report which reveals that increasing numbers of our fellow citizens in the UK are struggling to get enough to eat and are having to go into debt to pay for food?

If you’re a single person the effect of the bedroom tax, the housing benefit cap and the rise of the cost of living and from 1st April having to find a contribution to council tax out of adult JSA which may have been sanctioned already, I am afraid the future has well and truly arrived. Worrying about the children John Maynard Keynes never had or comments by academics you’ve never heard of is a luminous irrelevancy which is the privilege of the comfortably off and self-absorbed.

For an increasing number of people the immediate future includes such things as a court or tribunal hearing, repossession, visits by bailiffs and debt collectors at the door and summonses for failure to pay a sum council tax that it is impossible to afford.
Waffling on about supposed insults to Keynes certainly won’t count for anything when you’re in front of a County Court District Judge, at a bankruptcy hearing or appearing in the magistrate’s court this week,or any week.

@BobB 19

You seem to consider our current state if affairs as undesirable and unintended. As usual you can quote scholarly articles and comment at length without seeing what is in front of your nose. We are seeing a drive towards a low wage economy with the entrenchment of privilege and power. It was precisely what was intended.

Don’t be distracted by Japan. As has often been the case, Japan is only an example of itself.

I think it’s important to put Keynes’ comment “in the long run we are all dead” in perspective and in context.

He was responding to a classical economist who was arguing that markets always stabilised “in the long term”, and was pointing out that such economists could define the long term in such a nebulous way as to be meaningless for practical economists/politician.

Hence “in the long run we are all dead”.

I don’t think he gets it. Most of the infrastructure of this country was built by the generations before us and we have them to thank for our standard of living today. Most of this infrastructure was built by borrowing to invest. If past generations hadn’t borrowed to invest then we most probably would still be getting water from wells and using gas to light our homes.

Keynes wasn’t gay anyway. Niall Fergusson can’t even get that right.

[22] I agree – nowadays certain gaffs are seized on as political weapons while the self righteous are busy loving themselves in the court of perfection – needless to say character assassination is easier to accomplish then rectifying, or even properly identifying the dire consequences of failed economic, and social policy.

The Hitch described this phenomena as follows – ‘I had become accustomed to the pseudo-left new style, whereby if your opponent thought he had identified your lowest possible motive, he was quite certain that he had isolated the only real one. This vulgar method, which is now the norm and the standard in much non-Left journalism as well is designed to have the effect of making any noisy moron into a master analyst’.

I do not know much about Ferguson but the nature of his apology does not really fit if some think homophobia is stamped on the man’s DNA, the implicit message in the OP strap line.

@ 21

“the effective rebuttal of Ferguson’s claim that Keynes had no interest in the future because he had no children is that Keynes was a high-profile advocate of eugenics ”

This indicates not his concern for the future but the arrogant contempt he had for ordinary people, whose reproduction he wished to ‘manage’ (forced sterilisation, adoption, euthanasia etc) in the same way as he wished to ‘manage’ the economy. Not a very nice man.

the nature of his apology does not really fit if some think homophobia is stamped on the man’s DNA

indeed not – but this is not the first time he’s made these kinds of claim, as the OP also makes clear, and he’s never issued a denial of its presence in his earlier work.

That Hitchens quotation sadly works much more effectively when one levels it at Ferguson himself. Like so many other British ‘intellectuals’ who cross the pond (including Hitchens), he’s ended up simply giving the audiences who so uncritically laud him what they want to hear, rather than actually doing the work of a proper historian.

This is also a tedious example of a self-proclaimed Feminist calling a gay man ‘girly’ and thus unworthy of interest.

Richard Carey: “This indicates not his concern for the future but the arrogant contempt he had for ordinary people, whose reproduction he wished to ‘manage’ (forced sterilisation, adoption, euthanasia etc) in the same way as he wished to ‘manage’ the economy. Not a very nice man.”

I tried to make it abundantly clear that eugenics was a popular ideology among several of Keynes’s celebrated contemporaries, as a little Googling can easily establish. But that in no way undermines his seminal contribution in developing an alternative economics model to account for how a market economy could get stuck at a low-level equilibrium with persistently high unemployment.

Keynes’s comment: ‘In the long-run we are all dead’ was a reaction to prevailing conventional wisdom which regarded deep recessions as a merely temporary aberration in the market which would pass in due course – meanwhile, lost GDP was lost forever and blind faith in the self-regulating power of market continued unabated.

Schumpeter’s Big Idea was that market economies were driven along by spurts of innovation – which was hardly original as Marx had already recognised this in The Communist Manifesto (1848). Deep recessions – as Schumpeter’s narrative goes – eventually come to an end when the next big spurt of innovations comes along: Schumpeter’s ‘gale of creative destruction’. But innovations arrive unpredictably and there can be much lost GDP and social misery in the mean time, hence the ‘demand management’ interventions of keynesian economics.

Cherub: “We are seeing a drive towards a low wage economy with the entrenchment of privilege and power.”

Keynes went along with the conventional wisdom that real wages (or the real costs of employing labour) would need to fall for employment to increase. The policy controversy was over how that was to be achieved.

The keynesian tradition started from the premise that workers could, at most, only control their money wage rate – changes in real wages depended on what happened to prices and that was beyond their control. The fashionable prescription of general cuts in money wages was regarded as unlikely to work for two reasons: (a) general cuts in money wages would reduce the money incomes of consumers and, therefore, aggregate monetary demand and (b) competition between producers in a recessed economy would as likely result in equivalent price cuts. The likely overall result would be much industrial strife with little reduction in real wages and, importantly, bring the real risk of a deflationary spiral of prices in which businesses postponed investment spending in the expectation that prices of the assets it was intended to invest in would inevitably be lower next year.

Slurs of Keynes do nothing to address keynesian analysis – or the facts of the present situation. Why invite Ferguson to speak on a topic well beyond his professional expertise when there are plenty of other professional economists around who know more about economics thinking and could do a better job?

If there too many suspect keynesian economists around, then try those in the other camp, such as the contributors to: Rethinking Expectations (Princeton UP 2013), edited by Edmund Phelps. Of course, economic models based on the premise that the world is populated by rational agents, endowed with foresight, operating in self-regulating markets has a tough job explaining how the financial crisis came upon us when, as Greenspan put it in testimony to a Conressional inquiry: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”

And then they might reflect on the timely warning from Warren Buffett in 2003: “The rapidly growing trade in derivatives poses a ‘mega-catastrophic risk’ for the economy . . “

@ BobB,

“I tried to make it abundantly clear that eugenics was a popular ideology among several of Keynes’s celebrated contemporaries”

Indeed it was, especially prominent Fabians. This is very revealing of the mentality of that brand of socialism, which was nothing to do with workers having power, but social engineering by an “enlightened” elite.

“But that in no way undermines his seminal contribution in developing an alternative economics model”

If that were true, I suppose it wouldn’t, but his belief in eugenics does correspond closely with his view of the economy, and the necessity for people like him, to be in control over the rest of us “lesser mortals”.

Richard Carey: “If that were true, I suppose it wouldn’t, but his belief in eugenics does correspond closely with his view of the economy, and the necessity for people like him, to be in control over the rest of us ‘lesser mortals’.”

There is nothing especially unusual about the advent of financial crises so economic theories which allow for this unwelcome reality are likely to be more illuminating than those which remain in denial. Try Carmen and Rogoff on: This time is different – “This paper offers a ‘panoramic analysis of the history of financial crises dating from England’s fourteenth century default to the current United States sub-prime financial crisis.”
http://www.nber.org/papers/w13882.pdf

For an insight into how markets become dysfunctional, try this on the South Sea Bubble of 1720 in Burton Malkiel: A Random Walk Down Wall Street:

“The prize must surely go to the unknown soul who started ‘A Company for carrying on undertaking of great advantage, but nobody knows what it is.’ The prospectus promised unheard of rewards. At nine o’clock in the morning, when the subscription books opened, crowds of people from all walks of life practically beat down the door in an effort to subscribe. Within five hours a thousand investors handed over their money for shares in the company. Not being greedy himself, the promoter promptly closed up shop and set off for the Continent. He was never heard of again.”

The brute fact is that, on the evidence, markets are not dependably self-regulating. Osborne’s recognition that market interventions are unavoidable is indicated by the coalition government’s recent legislation to beef up the regulatory responsibilities and statutory functions of the independent Bank of England. The implication is that when Britain’s macroeconomy malfunctions in future, the Bank will be held as responsible, not the elected government, so the message is hurl brickbats at the Bank and vote Conservative.

The causes of the financial crisis in America are many and complex. There is a good analysis in Alan Blinder: After the Music Stopped (Princeton UP 2013). For Britain, try Robert Peston: How Do We Fix This Mess. In both cases, bankers have much to answer for.

Abuse of Keynes – or other economists – doesn’t resolve the issues arising from market failures. Free market capitalism is inherently unstable.

Bob b,

“There is nothing especially unusual about the advent of financial crises so economic theories which allow for this unwelcome reality are likely to be more illuminating than those which remain in denial.”

The Keynesian Columbus Complex. Just because he never bothered to read any other economists than his patron Marshall, (in such ignorance he could cavalierly dismiss all previous writers on economics with the term ‘orthodox’) doesn’t mean other economists hadn’t grappled with the issues that Keynes did.

“Free market capitalism is inherently unstable.”

Maybe so, but so is capitalism ‘managed’ by central bankers and government regulations, which mainly serve to create privileges and moral hazard, whilst preventing the law from operating, no matter how great the purported genius of silver-spooner types like Keynes.

Let’s face it, capitalism is unstable.

Richard Casey: “Maybe so, but so is capitalism ‘managed’ by central bankers and government regulations, which mainly serve to create privileges and moral hazard, whilst preventing the law from operating, no matter how great the purported genius of silver-spooner types like Keynes.”

The Conservatives aren’t saying: No contra-cyclical interventions to stabilise the economy. They have handed responsibility for interventions to the Bank of England – which will be using macroeconomic modelling of the economy to assess how and where the economy is likely to be moving and what to do with the monetary policy levers at the Bank’s disposal. If the economy continues to stagnate or turns worse the message will go out: Blame the Bank.

Abusing Keynes won’t resolve market failures.

Btw as Keynes was editor of the Economics Journal for umpteen years, he could hardly avoid reading what other economists were writing. In the depression years, what mattered is whether they had something constructive to say which could resolve how a market economy could get trapped in a low-level equilibrium and what to do about that. If their big idea was to hang around waiting for something to turn up, there wasn’t much point in what they were saying.

Ferguson was obviously talking rubbish that Keynes was not interested in the future. He did write a paper “Economic Possibilities for our Grandchildren.” There can be no consistent story about Keynes motivations because he was notoriously inconsistent. He was forever changing his mind and that was so well known the London papers caricatured him as the rubber man. The three main things to bear in mind about Keynes is he was first and foremost an elitist. “the class war will find me on the side of the educated bourgeoisie.” Background context of the era that he operated in and his all important personality because he was a pretty nasty vindictive person.

Keynes as an elitist hated the British trade unions with a passion and the context of his 1936, The General Theory of Employment, Interest and Money was to destroy the power of the unions and save the liberal free market from a socialist takeover. He considered a depressed economy and high unemployment as only strengthening the hand of the socialists. As a consequence he seen himself in a battle to save capitalism not from the capitalists, but from the socialists who would destroy the system. “that the world will not much longer tolerate the unemployment which … is associated–and, in my opinion, inevitably associated–with present-day capitalistic individualism. But it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom.” Keynes told playwright George Bernard Shaw that the whole point of The General Theory was to knock away the Ricardian foundations of Marxism.

Keynes opinion of the Labour Party:
“sectaries of an outworn creed mumbling moss-grown demi-semi Fabian Marxism.” He also termed it an “immense destructive force” that responded to “anti-communist rubbish with anti-capitalist rubbish.”

Communism:
“an insult to our intelligence.”

Das Kapital:
“an obsolete economic textbook, which I know to be not only scientifically erroneous but without interest or application for the modern world.”

Communists:
“People who produced evil in the hope that good may come of it.”

A good economy:
“Economic prosperity is … dependent on a political and social atmosphere which is congenial to the average businessman.”

That was the context that Keynes operated in and what motivated him during the 1930s. There is absolutely no main economic points in the General Theory that are original insights. Keynes took other people’s insights and ideas and presented them as his own. Some of them were centuries old. His sometimes colleague and friend Hawtrey at the Treasury was a far superior economist. Hawtrey is associated with the “Treasury View” which was true. Britain could not boost its economy with public works as long as it remained on the Gold Standard. However, Keynes is the one history remembers.

Another important background context of that era that tended to bring out the worst in Keynes was a great academic battle for supremacy between Cambridge and the LSE. Keynes was on the side of Cambridge and would automatically be scathing on anything that came out of the LSE. When his younger friend Hayek at the LSE released a book, Prices and Production. Keynes reviewed the book and called the book “one of the most frightful muddles I have ever read”. “It is an extraordinary example of how, starting with a mistake, a remorseless logician can end in Bedlam.” Friend or not he was jealous that someone else was getting attention and his vindictive streak surfaced.

“Keynes is the one history remembers”

That’s true enough. His contemporaries Kalecki and Tinbergen independently produced theories of aggregate demand driving the economy. What matters is the departures from the received conventional wisdom of those times that persisting depressed economies were temporary aberrations about which nothing much could – or need be – done and that the appropriate response to budget deficits because of falling tax revenues is public spending cuts to rein in the deficits, regardless of what did to aggregate demand and GDP.

The mainstream current macroeconomic textbooks – like Blanchhard’s Macroeoconomics – show a pervasive influence of the keynesian revolution. That is what matters nowadays, not tiresome disputes about what Keynes said and meant or intended to mean in the 1930s. The trouble is that there are some who appear determined to revert to the previous conventional wisdom as though Keynes and his ilk had never been around.

@36. Richard W

That post was lengthy but damned fucking funny.

Keynes was born in 1883 for God’s sake. It was a different world when he was living. Are we now to project our modern views of sexuality back into the past and look at it like we do today?
So Niall Ferguson had a sly pop at gay people. So what? He might not be as PC as we’re all meant to be these days. It’s allowed still I think.
Was it him who said something about when WW2 broke out, that the kind of young men that Keynes ”used to pick up” were all joining the forces?
Middle aged men ”picking up” young men does come across as a bit tawdry, the same as it is for older men trying to pick up young women.

steveb @ 34:

“Let’s face it, capitalism is unstable.”

So is life, so is nature. And all attempts to eliminate instability in social and economic life lead inexorably to tyranny.

Short-termism might well rise as the birth rate in a society shrinks (or shrinks in the economically active section of a society) for whatever reason. It’s not an unreasonable hypothesis and it could be empirically tested.

“So is life, so is nature. And all attempts to eliminate instability in social and economic life lead inexorably to tyranny.”

That is total, unmitigated garbage. Social administration of vaccines intervenes to prevent the spread of contagious diseases – smallpox, at one time a killer disease with a wide and frequent incidence, has become extinct. Is that tyranny? Are antibiotics tyranny?

Schooling in most affluent countries is mandatory up to 16 years old to ensure basic standards of competence in reading, writing and arithmetic – is that tyranny?

Most folk consider that social infrastructure, like highways, electric power and electric grids, sewers and public parks are crucial along with civil institutions, such as the rule of law, in enabling us to live civilised lives as even citizens of ancient Rome recognised – after all, aquaducts seriously interfered with the state of nature by diverting and regulating the flow of water.

We have law enforcement agencies to prevent regression to Hobbes’s state of nature where life is nasty, brutish and short.

Keynes was just cynical. To suggest he was cynical because he was gay is itself cynical.

Ferguson was obviously talking rubbish that Keynes was not interested in the future. He did write a paper “Economic Possibilities for our Grandchildren.” There can be no consistent story about Keynes motivations because he was notoriously inconsistent. He was forever changing his mind and that was so well known the London papers caricatured him as the rubber man. The three main things to bear in mind about Keynes is he was first and foremost an elitist. “the class war will find me on the side of the educated bourgeoisie.” Background context of the era that he operated in and his all important personality because he was a pretty nasty vindictive person.

None of which matters a shit: his legacy is his economic theory.

As to kids,I’m not sure someone who has dozens of them necessarily cares about their future.

BobB @ 42:

Lack of infrastructure and schooling are not instabilities, though I grant you epidemics are (but then I would not class epidemics as ‘social’ or ‘economic’). To remedy such lacks, we need a dynamic society, not a static and stable one.

I was thinking of authoritarian political theorists like Hobbes and Marx and our modern Greens, who all want a steady-state society – freeze-framed according to their ideological requirements.

I’ve just learned a new edition (the 4th) of Manfred Gartner: Macroeconomics (Pearson) is due out in a few weeks. The exposition is a bit less challenging than in Blanchard: Macroeoconomics and the strong point of the book is the inserts throughout showing documented policy applications of macroeoconomic theory with extensive citations. FWIW the 3rd edition impressed me but that came out before the financial crisis so I’m looking forward to this new edition. As with Blanchard, the keynesian revolution has had a pervasive influence on the analysis presented.

Shatterface: “None of which matters a shit: his legacy is his economic theory.”

Absolutely. This “gay” smear has all the hallmarks of a political stunt to divert public debate from the acutely embarrassing fact that free market capitalism is unstable and prone to have crises every so often – as Keynes and some other economists noted.

Their intention was to develop macroeconomic models capable of explaining that reality, which is why some feel impelled to discredit them by any available means.

I’m entirely content to be reminded that other economists besides Keynes, also developed theories in which market economies responded to changes in aggregate demand. One implication, of course, is that Keynes was less eccentric – and, importantly, less of an innovator – than he is made to appear. Moreover, the so-called keynesian revolution has not stood still since the publication of Keynes’s General Theory, which is why it makes good sense to read current mainstream texts on macroeconomics for insights into contra-cyclical fiscal and monetary policy.

Sadly, it has become very clear that some prefer to engage in smear and blame games rather than engage in rational debate about the coalition government’s policy when, as The Economist puts it, ” in the G20 club of big economies, Britain’s performance ranks second worst over the past five years, above only Italy’s. No slump in two centuries has been this bad.”

45

Marx and Hobbes have nothing to do with modern state interventionism, and in any case, why would Marx, a socialist, favour state intervention in a capitalist society?

28 Richard Carey: “This indicates … the arrogant contempt he had for ordinary people”

The bottom line about JM Keynes and the key determinant of his life, I’ve little doubt, is that he was hereditary Cambridge University aristocracy which breeds arrogance in the bone.

I’ve three Cantab grads in my immediate family and believe me, it’s a nightmare.

Oh, and before you ask, yes, I am the “black” sheep of the family.

48

You claimed capitalism is unstable. Marx sees capitalism’s instability as leading to socialism, which transcends instability. Yet there is no virtue in stasis. Indeed, a steady-state society will be less able to deal with externally derived change.

“You claimed capitalism is unstable”

Alternatively, try Carmen Reinhart and Kenneth Rogoff: This Time Is Different – 8oo years of financial crises (Princeton UP, 2009)

A little reminder of just how recently these crises happen and then get forgotten about :

“The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of about 747 out of the 3,234 savings and loan associations in the United States. … [At end 1995, the Resolution Trust Corporation] estimated that the total cost for resolving the 747 failed institutions was $87.9 billion.”
http://en.wikipedia.org/wiki/Savings_and_loan_crisis

In other words, that was only small stuff compared with the 2008/10 crisis.

Btw Saving and Loan Associations in America were approximately equivalent to the old mutual building societies in Britain.

50

And Marx would agree that there is no virtue in statis, this is one area where marxists and libertarians agree. You are making statements that do not reflect anything that Marx has written in order to feed your own particular beliefs.

@22 Alan Murdie “Rather than worry about an academic dispute and political correctness …”

While I empathise with the sense of desperation and urgency your comment voices, sorry to say, but your starting assumption here is totally false.

You remind me of the Animal Rights people who are so hopped up about the horrendous abuse and torture that animals are suffering every day that they want to insist that nobody does ANYTHING ELSE until animals are ‘saved’.

As a human society we are capable of doing many millions of different things simultaneously, and improving our education and understanding of the multiple interlocking problems we all face is never a waste of time. Indeed, it is essential as a basis for any action at all.

For interest, try this on Michal Kalecki’s Theory of Economic Dynamics:
http://monthlyreview.org/press/books/pb0818/

“Thus, although his training had been in Marxist economics, he succeeded in anticipating the Keynesian system, and, as Joan Robinson has pointed out, his claim to priority of publication is indisputable although he never mentioned this fact.”

Unlike Keynes, Kalecki proposed a functioning model of the business cycle to explain a succession of booms and depressions in market economies while Keynes focused on the inherent uncertainties and instability. Richard M Goodwin was another early exponent of endogenous business cycles in demand driven models of market economies.

All of this rather shows the homophobic attack on Keynes by Ferguson to have been seriously misplaced. Some of Keynes’s other critics are actually correct: Keynes wasn’t alone in starting or spreading the keynesian revolution, which is a powerful reason for considering recent texts on macroeconomics to better understand how the revolution in economic theory evolved since Keynes’s General Theory. To be taken seriously as a critic of keynesian economics, Ferguson needs to show where these texts go wrong. I don’t believe that he is up to arguing the issues with, for example, Blanchard.

@ Bob b,

” To be taken seriously as a critic of keynesian economics, Ferguson needs to show where these texts go wrong.”

In my experience, you are never bothered to read critics of Keynesian economics, and refer to them as ‘cranks’. The only ‘critics’ you will consider are those who are essentially fiddling with Keynes’s grand design.

Richard Carey: “The only ‘critics’ you will consider are those who are essentially fiddling with Keynes’s grand design.”

As mostly agreed in the thread here, Keynes wasn’t the sole originator of theories which see the economy as driven by aggregate demand.

Such theories and their subsequent developments have become the staple of current mainstream textbooks like Olivier Blanchard: Macroeoconomics or Manfred Gartner: Macroeconomics. Blanchard is currently chief economist at the IMF and was previously a prof at the MIT.

The principal alternative offering – the Rational Expectations theory – is based on a premise of economies populated with rational agents endowed with foresight operating in self-regulating markets. But reality is nothing like that.

Rational Expectations models have a major problem explaining the many successive crises in market economies, as evinced by Carmen Reinhart and Kenneth Rogoff: This Time is Dofferent – 800 years of financial folly (Princeton UP 2011). The obvious policy issue is what to do about such crises when there are significant loses of GDP, recalling that lost GDP is forever lost.

The British economy is still running below its previous peak in 2008Q1. The present recovery from recession is the slowest since 1930:
http://www.guardian.co.uk/news/datablog/2009/nov/25/gdp-uk-1948-growth-economy

@ Bob b,

you are not contradicting my assertion that you will not consider the critics of Keynes’ theories, but rather concentrate on those who fiddle with those theories in their vain attempts to find ‘models’ which explain the real world. The fact that such people are in charge of the IMF etc. explains in part the mess the world economy is in, and why Keynesians should take their share of the blame, rather than moaning ‘if only they’d listened to us and printed X trillion dollars more’.

Richard Carey: “you are not contradicting my assertion that you will not consider the critics of Keynes’ theories,”

The world and economics have moved on since JM Keynes died in 1946. Mainstream texts – like those of Blanchard and Gartner – review rhe critics of macroeconomic models which regard market economies as demand driven in the short run in market contexts where uncertainty prevails. And try, for example: Paul De Grauwe: Lectures on Behavioural Economics (Princeton UP 2013). I’ve already posted @30 a reference to Edmund Phelps (ed): Rethinking Expectations (Princeton UP 2013).

The problem is that models starting with assumptions that the world is populated by rational agents with foresight, operating in self-regulating markets, just aren’t credible. I take as my starting point that, on the evidence, market economies exhibit periodic bouts of instability and that we need to assess policy options that can deal with that.