Friday, June 25, 2010

Why Keynes is wrong

This is a summary of by Jack Crooks excerpted from his daily comment on Friday May 28 this year.

It discusses Jacks opinion of a masterpiece of Economic thought that argues, in my opinion very convincingly, that John Maynard Keynes and the whole Keynsian economic philosophy that Western governments have based their economic policies on is the cause of our present economic woes.

This is the book:
The Failure of the “New Economics,” written by Henry Hazlitt, published in 1959.

The entire book deconstructs John Maynard Keynes masterpiece —The General Theory of Employment Interest and Money, published in 1936.

Henry Hazlitt did the seemingly impossible, something that was and is a magnificent service to all people everywhere. He wrote a line-by-line commentary and refutation of one of the most destructive, fallacious, and convoluted books of the century. The target here is John Maynard Keynes's General Theory, the book that appeared in 1936 and swept all before it.

In economic science, Keynes changed everything. He supposedly demonstrated that prices don't work, that private investment is unstable, that sound money is intolerable, and that government was needed to shore up the system and save it. It was simply astonishing how economists the world over put up with this, but it happened. He converted a whole generation in the late period of the Great Depression. By the 1950s, almost everyone was Keynesian.

But Hazlitt, the nation's economics teacher, would have none of it. And he did the hard work of actually going through the book to evaluate its logic according to Austrian-style logical reasoning. The result: a 500-page masterpiece of exposition.

This book is available on

You economist wonks should devour it. The rest of us should heed the lessons of this man and Milton Friedman.

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