Refuting Keynes, Line-by-Line

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If I were a young man, I would not share this. I would implement it. It would become the foundation of my academic career.

The Austrian School of economics, more than any other, is built on the idea of the centrality of entrepreneurship. Ludwig von Mises explained the principle profit and loss in terms of some forecasters’ ability to foresee consumer demand, and then plan to meet it at a total cost below the sales price. Successful entrepreneurs gain profit as a residual. Unsuccessful entrepreneurs gain losses.

According to Mises, the secret of making a profit is to foresee what your competitors do not see. This applies to every area of production. It surely applies to academic careers.

Gaining tenure — legal immunity from free market forces — is an exercise in niche-mining. It begins early. A Ph.D. candidate who has passed his written exams must then write a dissertation. The ideal dissertation topic is one that is so obscure that no one has paid any attention to it in at least twenty years — if ever — but which is sufficiently relevant to gain the acceptance of a dissertation committee. The topic should be so limited in scope that a candidate can crank out 200 pages in 18 months or fewer. Finally, his conclusions should match the overall views of his dissertation committee. Choosing this topic is an exercise in entrepreneurship.

A similar exercise begins — or should begin — at the end of an untenured assistant professor’s first year of teaching. In year one, he must demonstrate that he can lecture without signs of terror, that he shows up on time, and that he is able stay three pages ahead of his teaching assistant, if he has one.

At this point, he should decide on a career-launching topic. This topic should define his entire career. The more specialized, the better.

He is entitled
to a false start. Israel Kirzner had one with his book, An
Essay on Capital
(1966), published by Augustus Kelley, which
specializes in reprinting out of print books whose copyrights have
lapsed. It sank without a trace. Then he switched gears. His Competition
and Entrepreneurship
(1973) made his reputation. It was published
by the University of Chicago Press. Perceiving a profitable opportunity,
he wrote Perception,
Opportunity, and Profit
(1979), also published by the University
of Chicago Press. Then came The
Meaning of Market Process
(1992), published by Routledge,
a British publisher. Then came The
Driving Force of the Market
(2000). In between were lots of articles on entrepreneurship.

Kirzner was one
of four Ph.D. students produced by Mises. He was the only one whose
career gained traction in academia. His career illustrates the career
summary of the legendary Tammany Hall politician, George Washington
Plunkitt: “I seen my opportunities, and I took ‘em.” Go and do thou


A tried and true method of gaining a hearing is to challenge a conventional view. But this must be done judiciously. This must not be a frontal assault on the prevailing view. To challenge the prevailing view early in your career is to secure for yourself a one-way ticket onto a community college faculty, probably part-time.

To begin challenging the prevailing view, focus on something obscure in the establishment’s outlook. Show how the prevailing view has ignored something or has produced an anomalous conclusion. This would make a good article for publication in a third-tier academic journal.

Repeat the process. Write another article, this time on an implication of your initial revision. Try to get into a second-tier journal.

Over time, you build up a portfolio of articles that undermine bits and pieces of the establishment’s view. This is guerilla warfare. Avoid a frontal assault. Hit and run.

Never lose sight of your ultimate goal: to become known as the scholar who undermined the prevailing view. But this reputation will come only after the prevailing view has been toppled by reality. Ideas have consequences, but only after reality have even greater consequences.

There were still academic Marxists who got a respectful hearing prior to the collapse of the Soviet Union in 1991. Academia respects power. In the social sciences, it respects power above all other criteria. As long as the USSR had power, academia gave Marxists a hearing. After August 21, 1991, academia turned on Marxists the way that jackals consume the remains of a gazelle killed by lions.

As with all things entrepreneurial, timing is crucial. Launch a frontal assault too early, and it’s community college time. Launch it too late, and you’re Dr. Me Too.


John Maynard Keynes is an academic giant in our era. He toppled his predecessors in the midst of enormous self-doubt in academic economic circles. The Great Depression seemed to refute the concept of the market-clearing process. Few free market economists focused on the underlying institutional problems of the depression. One was government-imposed price floors on wages and retail prices. Another was the implosion of fractional reserve banking. The market did not clear because it was not a free market.

Keynes spotted an opportunity after his Treatise on Money (1931) produced little impact academically. By 1931, the depression was undermining the academic establishment. He then wrote The General Theory of Employment, Interest, and Money (1936), which provided academic support for what all national governments were doing by 1931: running huge deficits.

His publisher, Macmillan, covered its bets. It published Lionel Robbins’ The Great Depression in 1934. Robbins offered a cogent free market explanation for the depression. Younger economists did not believe him. By the end of his life, even Robbins no longer believed him. He told Mark Skousen that the book had been a mistake. A year after Keynes’ General Theory, Macmillan published Banking and the Business Cycle, by Phillips, McManus, and Nelson, which was far better than Robbins’ book. (They are available on the site: “Literature.”)

Keynes’ book caught on. Macmillan still sells it. This was highly successful entrepreneurship. It illustrates an investor’s rule: “Cut your losses, and let your profits run.”

Today, Keynesianism is having a revival. The economists have their fingers in the wind, as always, and the wind is blowing hurricane-force deficits. The economists have returned to Keynesianism like dogs to their vomit. While several hundred economists have publicly challenged the Keynesian policies of Obama’s Administration, they are generally not well-known and few of them teach in major research universities.

An entrepreneurially oriented young economist should see what is coming: mass inflation or depression or both, as Austrian business cycle theory teaches. Thus, he should begin positioning himself. He should devote his career to one topic: a line-by-line refutation of The General Theory.


A serious economist should not ignore any of the media.

Scholarly Journals. Focus on narrow topics. Play the math game, if possible. Show how certain minor implications of The General Theory have not worked out. Start with a less prestigious journal. Just get into print. Write a stream of these articles. If necessary, survey the history of academic debates over this narrow issue.

Monographs. A monograph published by a university press is always good for a career. Start with a topic where there are doubts about Keynes’ original insight. Survey these debates. Offer a conclusion: Keynes was wrong about something. Tie this to the market-clearing process if possible.

Teacher’s Guide. A guide saves time. Scholars want to save time. Nobody wants to read The General Theory after page 3. You should strive for clarity. Do what you can to make Keynes clear. Avoid offering refutations. This publication is for establishing your reputation as an expert on The General Theory.

Website #1. This site should be devoted to understanding The General Theory. Publish otherwise unpublishable shorter essays and notes on The General Theory. Break this site into categories. Cover the entire book. Take your time.

Glossary. Summarize his definitions. Support this with direct quotations from the book. Then contrast each definition with traditional definitions prior to 1936. Cite original sources. This can be part of your website. At some point, publish a book on this if a university press refuses. No one is sure what Keynes meant. If you can help economists figure this out, they will use your book or website.

Critical Essays. Begin writing critical essays. As you develop your portfolio of explanatory publications, which gain credibility, add to an unpublished reserve of essays on specific topics. Get them ready for publication five or more years out.

YouTube Channel. Create a channel on YouTube. Go through The General Theory concept by concept. Make this explanatory initially. These 8-minute videos direct viewers to your website.

Email List. Use to create a weekly or fortnightly email letter on Keynes. These should be mainly biographical — things that people will read because they are interesting. Keep them short: under 200 words. The letters remind readers that you are the expert in Keynes. Post older letters on your site in one category.

Website #2. This is devoted to dissecting The General Theory. Start this before your major critiques. Link to this site from your original site.

Major Critique. This should be on the lines of Arthur Marget’s anti-Keynes Theory of Prices (1941), which never gained enough readers to be worth dropping down the memory hole later on. It should be as clear as Henry Hazlitt’s The Failure of the “New Economics” (1959). It had better be clearer than W. H. Hutt’s well-meaning but nearly unreadable books on Keynes. It should rely on Hutt’s Theory of Idle Resources (1939). Publish this ten years after your first publication in a scholarly journal. This book is your frontal assault. Don’t start with this book. Launch your career’s second phase with it. Devote your remaining years to a detailed refutation of every aspect of Keynes’ thought and career.


If you are in a community college and do not mind staying there, do your homework first. Master The General Theory. Publish anything that will help non-economists understand Keynes. Start positioning yourself as anti-Keynes.

Write a study guide for Hazlitt’s Failure. Master Marget’s book. Become an expert on what was wrong with Keynes. Then translate this into Hazlitt-style English.

This will probably cut off your career in scholarly journals. Murray Rothbard took this step no later than 1960.

If you are known as a hard-core opponent of Keynes, a university press will probably not publish your books. If your critique is openly based on Austrianism, forget about it.

Start including anti-Keynes insights into all of your work, from glossaries to monographs. Self-publish them as eBooks and as print-on-demand books. Use YouTube to gain followers among non-economists.

In short, write for non-economists. Take no academic prisoners. Make it clear that Keynesian economists are ideological, pro-State, tenured dolts.

This strategy is risky. It is what I would do. But I got out of academia in 1980, after one semester. I have never regretted that decision.


Understand in advance that you will change few minds until economic events force a reconsideration of Keynesianism. The economy must be so bad that Keynesians have no plausible solutions.

Mimic Keynes, who let the Great Depression soften the opposition. They lost confidence. He was there to administer the execution.

Gary North [send him mail] is the author of Mises on Money. Visit He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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