What Fresh Hell Is This?

June 5, 2013

Happy Birthday John Maynard Keynes

Today is June 5.

On June 5th in 1883, economist John Maynard Keynes was born.

Why is this important?  He's the "Keynes" of "Keynsian economics" and agree with him or not, he's among the most influential economists of the 20th century.

When faced with the problem of stubborn persistent unemployment in Great Britain, Keynes had an idea:
The solution to this conundrum was seemingly simple: Replace the missing private investment with public investment, financed by deliberate deficits. The government would borrow money to spend on such things as public works; and that deficit spending, in turn, would create jobs and increase purchasing power. Striving to balance the government's budget during a slump would make things worse, not better. In order to make his argument, Keynes deployed a range of new tools—standardized national income accounting (which led to the basic concept of gross national product), the concept of aggregate demand, and the multiplier (people receiving government money for public-works jobs will spend money, which will create new jobs). Keynes's analysis laid the basis for the field of macroeconomics, which treats the economy as a whole and focuses on government's use of fiscal policy—spending, deficits, and tax. These tools could be used to manage aggregate demand and thus ensure full employment. As a corollary, the government would cut back its spending during times of recovery and expansion. This last precept, however, was all too often forgotten or overlooked.
And so on.

Of course, he's not without controversy recently:
Historian and author Niall Ferguson has apologised "unreservedly" for "stupid and tactless" remarks in which he implied that John Maynard Keynes did not care about future generations – because he was childless and gay.
Whah? You can read more of what he said here.  Suffice it to say that Ferguson's apology was swift and complete:
“I should not have suggested,” Ferguson writes, “that Keynes was indifferent to the long run because he had no children, nor that he had no children because he was gay. This was doubly stupid.”

Ferguson noted that people who have no children can and do care about future generations. He also said he forgot that Keynes’s wife had suffered a miscarriage.

“My disagreements with Keynes’s economic philosophy have never had anything to do with his sexual orientation.” Ferguson also says. “It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life. As those who know me and my work are well aware, I detest all prejudice, sexual or otherwise.”
Unfortunately, that hasn't stopped local conservative Jerry Bowyer from sticking to something that Fergsuson has called doubly stupid:
The signals have been sent: the Keynes/homosexuality/theoretical distortion theory is not only wrong, it is blasphemy, punishable by instant anathematization and career immolation, at least as far as academic and corporate life are concerned. Even some conservative commentators have denounced Ferguson and, to the degree that he has found ‘defenders’ on the right such as Mark Steyn, their contributions have been more along the lines of pointing out the thought-police-like response to Ferguson than actually defending the theory itself.

But fear not, Grand and not-so-grand Inquisitors, your wood pile will not go to waste. I intend to defend the notion that Keynes’ sexual outlook is likely to have distorted his views of economics.
Yea, good luck with that Jerry.

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