Friday, July 6, 2012

Richard Posner Turns Keynesian

By Mario Rizzo

Richard Posner’s latest conversion is both charming and alarming. It is charming because it exhibits a youthful enthusiasm for a newly-discovered idea: Keynesianism. He just recently read John Maynard Keynes’s book The General Theory of Employment, Interest and Money. Posner’s tone echoes that of Paul Samuelson:

“To have been born as an economist before 1936 was a boon—yes. But not to have been born too long before!”

Then Samuelson quotes William Wordsworth:

“Bliss was it in that dawn to be alive,
But to be young was very heaven!”

I can see why Posner might find it liberating. In recent years Posner abandoned his rational-choice approach in law for what he has been calling “pragmatism.” Keynes also thought of himself as a pragmatic, non-doctrinaire person – one who by skillful policy would save the best of capitalism. (Of course, his antipathy to stock markets, the resource-allocation role of interest rates, and even the idea of inherent scarcity makes one wonder what he was trying to save. Let that pass.)  

So Keynes enables Posner to throw off the shackles of rational choice almost completely.  
It is also alarming to see Posner go this way – picking up the “latest” intellectual fashion with little regard for the mountain of scholarly criticism of Keynes’s book that has accumulated since its publication. Posner is a voracious reader and a brilliant man. Has he forgotten to perform his “due diligence”? I do not know. I do know that he writes his article in The New Republic as if nothing had been written critical of Keynes. It especially disturbs me that he ignores both F.A. Hayek and Milton Friedman, each of whom had a few important things to say.  

Perhaps it is too much to ask for subtlety in a magazine article. And yet Posner has been subtle in general forums of discussion in the past.  

As an author of The Economics of Time and Ignorance, I am fully on board about incorporating some of the valuable insights Keynes had in my own largely Austrian perspective. I have even blogged about the similarities between Keynes’s view of the method of economics and that of Hayek. They both were strong proponents of “subjectivism” and opponents of excessive formalization.
On the other hand, I can understand the dismissive attitude toward Keynes exhibited by Ludwig von Mises. Mises thought that Keynes was an enemy of the economic way of thinking. He entitled a critique of Keynesianism, “Stones into Bread: The Keynesian Miracle.”

Read the rest here.   


  1. I don't think Posner cares for the truth. A lot of intellectuals are more interested in how elegant/beautiful an idea is, rather than how sound/valid its premises and conclusions are are.

  2. There are many Austrian economics authors such as Mr. Rizzo who have written critically of Neoliberal finance and the Neoliberal regime, that is the Milton Friedman, Free To Choose, floating regime, also known as the Banker Regime.

    Professor Rizzo has edited what is now an extensive series of Austrian Economics books called “The Foundations of the Market Economy” published by Routledge in London and New York. He is also a series editor of the research annual, Advances in Austrian Economics, as well as a co editor of a series, “The Political Economy of the Austrian School”, published by NYU Press.

    I relate that since the early 1950s and especially in 1971 with the abandonment of the gold standard by Nixon to engage in the Vietnam war and greatly expand US hegemony globally, neoliberalism has seen a throwing off of rational choice to engage in a global debt trade which has stimulated inflationism and caused crony capitalism and European Socialism to rise as the dominant economic and political paradigms.

    According to the dispensation of the fullness of times, or what Witness Lee calls, The Economy of God, paperback available from Amazon, seen in Ephesians 1:10, the Sovereign God, Ephesians 1:14-21, is acting to replace Neoliberalism with Neoauthoritarianism, as seen in the rise of the Beast Regime of Revelation 13:1-4, which is also regional known as global governance as foretold in Daniel 2:30-33, as the new dominant economic and political paradigm. This ten toed kingdom, will be comprised of the iron of diktat and the clay of democracy, and being unsustainable, will collapse; out of which mankind’s final kingdom — a one world government will arise.

    Neoauthoritarianism, after the soon coming Financial Armageddon, seen in Revelation 13:3-4, will see a shackling on of debt servitude, beginning in the Eurozone, as the First Horseman of The Apocalypse, Revelation 6:1-2, transfers the baton of sovereignty from sovereign nation states, to sovereign leaders and sovereign bodies such as the ECB.

    Future EU Leader’s framework agreements will serve as the constitution for the New Europe, where Leaders meet in summits and waive national sovereignty, and pool sovereignty regionally. Soon a New Charlemagne will rise out of Financial Armageddon, Revelation 13:3, to rule the Euro zone, where Germany will be preeminent, as a type of revived Roman Empire that governs the European continent. Euroland’s future leaders is today, one of seemingly little authority, and appropriately is termed the Little Horn, Daniel 7:7-8. Last Days Org provides a list of this leader’s characteristics. And A Thousand Points Of Resistance provides a list of this leader’s characteristics as well.

    Wolfgang Weber, writes in WSWS President Gauck demands more support for Germany’s army. President Gauck’s recent speech to the federal armed forces lays bare the ideological foundations of the drive for the militarization of Germany’s foreign policy.

    Europe’s soon coming Sovereign, Revelation 13:5-10, will come with Germany’s military might, to rule globally, Daniel 11:39-44, and will establish his headquarters in Jerusalem, Daniel 9:27; Matthew 24:15, for mankind’s last 3 and ½ years, Daniel 7:25 and Revelation 13:7. Perhaps the EU’s king will be Olli Rehn, or Herman van Rompuy, or Jean-Claude Juncker, or Guido Westerwelle; he will be accompanied by a banker, Revelation 13:11-18, perhaps Jens Weidmann, or Mario Draghi; their word, will and way, will be the law of the Eurozone, replacing all constitutional and historic law. Their diktat money system will replace today’s fiat money system where diktat will serve both as money and credit. People will actually come to worship the Beast System and its rulers, Revelation 13:3-4.