Thursday, September 1, 2016

Why Keynesian Economics is Wrong

Richard Ebeling emails:

Dear Bob,

Edward Elgar has published a new book edited by Steven Kates on “What’s Wrong with Keynesian Economics,” which contains a chapter contribution by me on, ‘The Misdirection of Keynesian Aggregates for Understanding Monetary and Business Cycle Processes’. I explain the conceptual errors in the Keynesian “macro” approach and how and why it hides from view and confuses any more realistic understanding of the causes and cures for the business cycle.

While the hardcover is rather steep, selling at $145, there is being published a simultaneous paperback edition for $55, the latter not requiring you to take out a second mortgage on your house to buy it or putting up your first born as collateral.

Given the revival of the Keynesian mindset since the financial and housing crisis of 2008-2009, I believe that the contributions in this volume offer a valuable counter-weight, and with many of the contributors doing so from within the alternative “Austrian” tradition.

The editor, Steven Kates, should be known to some informed readers as the brilliant author of “Say’s Law and the Keynesian Revolution” (1998) and the valuable introductory volume, “Free Market Economics: An Introduction for the General Reader” (2011), both published by Edward Elgar.



  1. If this were a real court case based upon a Complaint by the Keynesians that the market fails and requires an external shot of momentum, it would be dismissed for the failure and utter refusal of the Keynesians to engage the Austrian claim that the 1929 depression and the 2008 crisis were caused by the mis-pricing that is the natural result of artificial credit creation. Failure to plead an argument for the Court results in waiver of the argument.

    Keynesians always lie.

  2. Further, I fail to see how the "arguments" of the Keynesians differ from the MSM coverage of, let's say, Obama's installation of Nazis in Ukraine or Israel's support for ISIS and the other Sunni rebels in Syria. Or the MSM coverage of how fiat money creation funds wars.

    Keynesianism is a scam and the perpetrators know it's a scam. Otherwise, they would not be so rigorous and meticulous in hiding the truth and would engage our analysis if only to refute it.