Lew: Whenever I see a reference to Keynes, I am reminded of his forward to the 1936 German edition of his General Theory. After condemning the “classical tradition” in economics – and specifically criticizing the Austrians – Keynes declares: “The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. . . . Although I have, after all, worked it out with a view to the conditions prevailing in the Anglo-Saxon countries where a large degree of laissez-faire still prevails, nevertheless it remains applicable to situations in which state management is more pronounced.”
Richard Nixon was, for once, quite correct in his 1971 statement “we are all Keynesians now.”
10:43 am on February 20, 2008
