“Keynesian economics is a permanent revolution.” — Mark Blaug
John Maynard Keynes (1883-1946), the British economist, was the most influential economist of the 20th century. His theories justified big government, the welfare state, inflation, easy money, deficit spending and progressive taxation.
Despite all of the efforts of free-market economists (the supply-siders, the Austrians and the Chicago school), Keynesian economics has survived and prospered.
In 1992, I collected a series of essays by top free-market economists in an academic book entitled “Dissent on Keynes: A Critical Appraisal of Keynesian Economics,” published by Praeger Publishing. It contains articles by Murray Rothbard, Bruce Bartlett and myself. It still is in print for $55 or more.
Now, two decades later, a second collection of anti-Keynesian articles has been compiled by eminent Australian economist Steve Kates. He is famous for his articulate exposition of Say’s law. This edited volume, entitled, “What’s Wrong with Keynesian Economic Theory?” includes articles by Peter Boettke, Art Laffer, Steven Horwitz and Richard Ebeling, as well as Professor Kates.
I also contributed an article on gross output (GO), the supply-side Austrian measure that offers an alternative to gross domestic product (GDP), the Keynesian measure of the economy. I am convinced that the only way to get rid of a bad policy is to replace it with a good policy. GO goes a long way in doing just that.
The paperback edition, published by Edward Elgar, is available here for only $38.50, plus $6 for postage and handling: http://www.e-elgar.com/shop/what-s-wrong-with-keynesian-economic-theory.
Professor Richard Ebeling and Mark Skousen at the Citadel.
In my book and the one by Professor Kates, critics of Keynesian economics demonstrate that government stimulus (so-called “fiscal policy”) does little to stimulate the economy and can cause a great deal of harm, especially in the creation of a monstrous national debt.
Yet, it continues to be advocated by government officials, along with an easy-money policy, permanently low interest rates and high taxes on the rich.
Why? Because it gives the impression that they are doing something about the downturn. Today, we are impatient. We want action. Yes, the markets and employment can recover on their own, but we don’t want to wait for a year or two years when there are these new tools of fiscal and monetary policy that can give us a temporary respite from losses in profits and jobs.
As long as price inflation appears subdued, investors like this never-ending policy of easy money and growing national debt. The new money goes into stocks and real estate, and most people are happy… until the next downturn.
In case you missed it, I encourage you to read my e-letter column from last week about the lesson of giving out valuable items for free. This article, and many other past Investor CAFE columns, can be found on StockInvestor.com. Invite you to follow it on Facebook and Twitter.
You Blew It!
Why Does It Cost $25 to Mail a Book to Canada?
I recently mailed a paperback copy of my book, “The Making of Modern Economics,” to a subscriber who lives in Toronto. The U.S. Postal Service charged me $24.50. It would have cost even more if I had sent the book via FedEx.
Meanwhile, that same paperback book can be mailed to Detroit via “media” mail for only around $4. Why the difference?
One reason for the difference is that the U.S. Postal Service only allows you to mail books via air mail, rather than truck.
But the biggest reason is because of the artificial border between Canada and the United States. These are two countries that enjoy a common culture and language, but the nations impose unnecessary expenses when goods and people cross the border.
FedEx is another good example. It charges $25 to overnight a package from New York to Detroit, but $50 to send the same package to Toronto, even though the distance between the two cities is similar.
When it comes to travel between the two nations, immigration is getting tougher as some are treating Canadians like aliens from another world, often harassing them if they come to the United States on business or travel too frequently. This is pathetic and has created a lot of animosity among people who travel between the two friendly nations.
Big Announcement about Next Year’s FreedomFest: Registration Now Open!
The theme for next year’s FreedomFest, our big 10th anniversary celebration scheduled for July 19-22, 2017, is going to be “Exploring New Frontiers Aboard the FREE Enterprise.”
We are expecting a record turnout, and have moved over to the top-rated Paris Resort in Las Vegas to make room.
Every year we have a celebrity keynote speaker at FreedomFest. In 2015, it was Donald Trump. In 2016, it was George Foreman. For next year’s celebration, we have confirmed one of the most famous icons in Hollywood TV history who captained the space ship U.S.S. Enterprise.
William Shatner! Since his highly successful TV science fiction franchise, he has became the spokesman for Priceline. He wisely took stock, not cash, and turned into arguably Hollywood’s top entrepreneur. You don’t want to miss this opportunity to meet Mr. Shatner in person, and get a signed copy of his latest book.
We also have some great panels and debates lined up, including one of “Is Success Due to Skill or Luck?” Robert Frank, New York Times columnist and author of “The Winner Take All Society,” makes the case that luck plays a bigger role than we think and, therefore, the federal government can legitimately tax the rich, while Alex Green, investment director at the Oxford Club, defends the rich and the successful to keep their hard-earned gains. The moderator will be Nicholas Vardy, editor of the Global Guru e-letter and The Alpha Investor Letter. The debate will be among many feisty ones planned for next year’s big show.
Registration is now open… take advantage of our “early bird” discount — save $100 per person if you register before Jan. 15. Already nearly 300 people have signed up! Go to http://freedomfest.com/register-now/ or call toll-free 1-855-850-3733, ext. 202 and talk to Jennifer, Amy or Karen. They are available to answer your questions and take your registration now.