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The Keynesian Delusion
In the 1930s a British economist by the name of John Maynard Keynes burst onto the frontlines of economic theory. Something of a revolutionary for his time, he diverged from his classical liberal predecessors (i.e. Hayek, Mises) that had previously dominated the scene. He approved of government interventionist policies and smiled favorably upon central bank monetary planning (something his Austrian counterparts would have surely frowned upon). It is telling that Keynes almost singlehandedly shifted the Western world’s economic persuasions. Was he especially brilliant? Were his theories just unquestionably correct, or so convincing so as to be so quickly latched onto?
It does seem probable that in part his glittering popularity had something to do with how appealing his theories were to the political classes, the academics, and the elites. These cadres were, after all, scrambling for a new economic philosophy in the tumultuous wake of the post-war and Great Depression period. The political landscape was changing, progressively giving way to more socialist-inclined notions. The libertarian-esque principles that emerged from Austria and had reigned in the past were no longer quite so in vogue. In America, the nation’s peoples were grappling with the aftermath of the market crash and were scrounging for an explanation. A new, more fashionable, and vaguely statist liberalism was underway.
