Keynes as Prophet

It is strange that people should still cite Keynes as an authority, 65 years after his death and 74 years after the publication of his General Theory.

Indeed, to anyone who considers Economics to be some sort of science, it should seem odd that its practitioners need to appeal to any prophet at all.

Scientific theories rest on their ability to survive  tests and provide a coherent account of phenomena. There is a dynamic interplay between theory and experience. We need not look back at observations made seventy years ago, because a useful theory will be used and tested all the time.

Recent appeals to Keynes supposed authority have not even been accurate.

Keynes famously advocated government deficits as a remedy for economic recessions, and opposed attempts to balance budgets during the recession of the 1930’s. He has recently been cited by people who oppose a reduction in our budget deficit. Yet there is this time no proposal to balance the budget.

The appeal of Keynes is his support for wishful thinking. Reduction in government expenditure and increases in taxes are disagreeable, so it is pleasant to have an ideology that tells us we needn’t bother. People who are usually hostile to what they call laissez faire seem willing to make an exception for the belief that the budget deficit will sort itself out without our doing much about it.