Keynes and the triumph of hope over economics


keynes

In a Financial Times op-ed, Benn Steil, author of Money, Markets, and Sovereignty, satirizes the tendency of economists to cite John Maynard Keynes in support of dramatic fiscal interventions where cold analysis should give us pause.

“Citing Keynes gives us special licence to talk economics without using any. To paraphrase the lawyers’ dictum, when the facts are on our side, we pound the facts; when theory is on our side, we pound theory; and when neither the facts nor theory are on our side, we pound Keynes – and to great effect.

Keynes, not coincidentally, had nothing to say about the proper components of fiscal stimulus. This allows him to be cited with great effect by both paternal progressives (who favour government spending) and caring conservatives (who favour middle-class tax cuts).”

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