Rating: 
Summary: A correction to the review by Mr 'teste101'
Review: > Interesting in the way _Mein Kampf_ is., April 17, 2001 >Reviewer: teste101 (see more about me) from Australia >Now that the "century of the state" is over and done with, it's >fun to look back on some of the century's larger errors.>One of the strangest was the "economist" (or whatever), Keynes. >Around the third quarter of the 20th century, I have to point out that John Maynard Keynes died in 1946 >the immense suffering, poverty and horror caused by "Keynesian" >(ie, socialist, money-spending) governments became obvious and >undeniable, even to Keynes.(Even though he had been dead for 25 years I suppose?) This is a political attack and non-sense as nations such as the USA and Great Britain have done rather well by following his advice. The damage caused to Third world economies has been caused by a huge number of factors, mostly war and following Marxist priciples of economy. >Keynes was asked if had a shred of guilt or unrest that his >pseudo-philosophy had caused so much poverty and pain to so >many millions, that his very name was used to describe that >type of "Keynesian" socio-economic system. His reply was "oh >well...we're all dead in the long run." I'd like to point out the exact quote and it's circumatances lest anyone take this persons comments as truthful. Keynes wrote after being told that things would work out allright in the long run: "This long run is a misleading guide to current affairs, In the long run we are all dead." >Oh well, Keynes is dead now, I suppose. >If you find it intriguing to read, say, Karl Marx (a bizarre >figure associated with early socialism), by all means have a >read of Keynes. >(All Keynes books are as odd, unintelligible and pointless as >the other, so it doesn't really matter which one you have a >look at.) I would advise that anyone interested in why depressions and booms in world markets occur and why the USA had such a large budget overspend for so long (and did very well because of it) really ought to give this book a try as it is the basis of virtualy all modern economic theories on how to tackle such problems. Yes it is difficult and yes it is worthwhile.
Rating: 
Summary: Read Henry Hazlitt along with this book and compare.
Review: Anyone interested in Keynesian economics at work should look at Japan over the last 25 years or so. The Keynesian solutions employed there are right out of the 'General Theory' and are crystal clear examples of the fallacies inherent in government directed economies. Hundreds of billions have been spent by the government pouring concrete under virtually every river and creek bed in that country (and least 60 percent of the ocean shoreline) in a vain attempt to stimulate the economy with make-work projects. Japan is on the verge of a depression. It is in fact the only developed nation since WW
II to be suffering from sustained deflation. I suspect few readers who start this book have the stamina or stomach to complete it but if you do I suggest you read Henry Hazlitts "The Failure of the New Economics" (a line by line analysis of the "General Theory") alongside it and judge for yourself how coherent, logical, or true, Keynes thought really is. For those of you who are not worshippers, employees, or dependents of the STATE and are capable of entertaining economic ideas other than totalitarian ones check out Mises.org as a starting point for free market economics and the writings of Hayek and von Mises. One might discover there the argument that depressions and wild business cycle swings are the result of government interference in the economy. It's an idea at least worth looking at. Anyone looking for a general introduction to economics could not do better than Hazlitts "Economics in One Lesson." It is short, intentionally clear and intellectually honest; the very opposite of the "General Theory." To the professors who have written in praise of this book and criticized others on this site I suggest reading a beginning textbook on logic and logical fallacies. I assume a few can still be found in university libraries. Just as an intellectual exercise, see how many fallacies you can discover in your own posts at this site. Sometimes I do it with my own writing when trying to be precise and objective, applying it like a spell checker tool and find it helps in clearing up sloppy thinking. Of course when arguing for a position by manipulating feelings because either reason doesn't support the case or one is not secure in its validity, logical fallacies are the tools of the trade.
Rating: 
Summary: Are We all Keynesians Now?
Review: Are We All Keynesians Now? Most educated Americans know something of John Maynard Keynes, the great British economist whose hugely influential work “T"The General Theory of Employment, Interest and Money", strongly influenced economic theory and practice during the last half of the twentieth century, particularly with regard to the role of government in stimulating and regulating a nation's’s economic life. Nevertheless it remains true that almost all of the "intelligentsia" in general, and most economists in particular, have never read the book, despite the fact that it is readily available in today’s mega-bookstores such as of course, Amazon.com (at a reasonable price and) in a good quality paperback. Indeed, by a curious twist, the people who seem most to have made some attempt to read Keynes' oeuvre are those who appear most outraged by it and determined to revile it. If one is skeptical about this, (read the reviews), where veritable "frothing at the mouth" denunciations seem to dominate. These would hardly be worth reading except for the mindset they reveal, which goes far toward illuminating some of the attitudes of the 1930's otherwise inexplicable at the beginning of the twenty-first century. Their very virulence convinces one that Keynes was clearly on to something; if an author enrages half the world he must be at least half right. Keynes detractors are right about one thing: "General Theory..." is a tough read, though not for some of the reasons they indicate. Keynes actually uses very little mathematics, the alleged prevalence of which is one of the points usually cited in criticism. He uses a little elementary algebra and a little differential calculus, hardly enough to swamp even the most modestly gifted sophomore who has been exposed to the subject.
He does not generally contradict himself, as some allege, beyond the level of ambivalence to be expected of anyone who realizes he is treating an inexact science where many conflicting views can hold some claim to legitimacy. Rather, what makes Keynes' work an ideal bedtime companion for those inflicted with insomnia is the obsessive care
the author takes to be absolutely precise, the somewhat antique 1930's British English
employed (though some, including the present reviewer, may see that as one of its charms)
and the regular use of Latin phrases familiar to Keynes and his contemporaries, such as, e.g., "ceteris paribus" (roughly translated "all things being equal", meaningless to American readers whose formative collegiate experience included little in the way of foreign languages of any kind, let alone classical ones. The trick in reading Keynes is to get beyond these inconveniences of packaging and unwrap the very real gift of ideas enclosed. Keynes' economic prescriptions are now so generally accepted, even by most conservatives, certainly including "W", that many of us find it hard to recognize what the argument is all about. These days it is taken for granted that the government has a responsibility to stimulate the economy out of recession, at least to the extent of reducing interest rates, and modestly applying the brakes during overexuberant expansion. It is accepted that two of the factors exacerbating economic downturns are the fearfulness of investors in the face of declining corporate earnings and the reluctance of consumers to to put down money they suspect they may need later if they are laid off from their jobs. It was not always so. Some imagine that Keynes work, along with the massive nineteenth century tomes of Karl Marx, constitute a response to Adam Smith's "Wealth of Nations" a work at least as misunderstood, often deliberately so, as "General Theory...". That is not the case; Keynes hardly ever, refers to Smith and, in any case, those who have read "Wealth of Nations" are well aware that Smith, a truly charming writer quite apart from his undeniable genius, is far more sympathetic to the average worker and much more critical of monopolistic business practices than imagined by those who have deified him but never read him. Instead, the dragons which Keynes sets forth to slay are those who later built a truly "Dark Tower" on Smith's rather benign foundation. Those dragons include, most notably, David Ricardo, Alfred Marshall and "Professor (A. C.) Pigou". Keynes cannot help but admit to the suspicion that these economists' written views on the question of employment, or the more pressing question of unemployment, reflected their identification of the social classes most likely to buy their books; he never states it quite that baldly, of course. It seems almost incredible to us in this age that the prevailing opinion expressed in those writings is that all unemployment, at the organizational if not the individual level, is voluntary; that depressions and large scale unemployment result from the perverse refusal of workers or their labor union representatives to recognize their labor as just another good in the market, subject to a reduced price in the absence of demand occasioned by downturns in economic activity.
One wonders if some of the tolerance for Adolf Hitler manifested by large segments of the British upper and middle classes, and smaller segments of their American counterparts, in part reflected his action on accession to the Chancellorship to reduce German wages by one third all around. Whether that, by itself, increased German employment numbers or simply made economic room for a huge rearmament program that effectively eliminated labor redundancy is a good question ?but for some other essay. Keynes argues quite persuasively that a perception of fairness is essential in a democratic society. (10 points to Adolf for fairness?) Wage reductions in capitalist economies tend to be spotty and opportunistic, rather than universal, typically affecting those who can least afford them. Keynes also argues that they do virtually nothing to solve the problems of the economy, partly because employers may very well decide not to decrease prices comparably and, more importantly, because of cascading effects on overall demand; workers on reduced wages don't rush out to buy new automobiles.
Rating:
Summary: Are We all Keynesians Now?
Review: Are We All Keynesians Now?Most educated Americans know something of John Maynard Keynes, the great British economist whose hugely influential work “T"The General Theory of Employment, Interest and Money", strongly influenced economic theory and practice during the last half of the twentieth century, particularly with regard to the role of government in stimulating and regulating a nation's’s economic life. Nevertheless it remains true that almost all of the "intelligentsia" in general, and most economists in particular, have never read the book, despite the fact that it is readily available in today’s mega-bookstores such as of course, Amazon.com (at a reasonable price and) in a good quality paperback. Indeed, by a curious twist, the people who seem most to have made some attempt to read Keynes' oeuvre are those who appear most outraged by it and determined to revile it. If one is skeptical about this, (read the reviews), where veritable "frothing at the mouth" denunciations seem to dominate. These would hardly be worth reading except for the mindset they reveal, which goes far toward illuminating some of the attitudes of the 1930's otherwise inexplicable at the beginning of the twenty-first century. Their very virulence convinces one that Keynes was clearly on to something; if an author enrages half the world he must be at least half right. Keynes detractors are right about one thing: "General Theory..." is a tough read, though not for some of the reasons they indicate. Keynes actually uses very little mathematics, the alleged prevalence of which is one of the points usually cited in criticism. He uses a little elementary algebra and a little differential calculus, hardly enough to swamp even the most modestly gifted sophomore who has been exposed to the subject.
He does not generally contradict himself, as some allege, beyond the level of ambivalence to be expected of anyone who realizes he is treating an inexact science where many conflicting views can hold some claim to legitimacy. Rather, what makes Keynes' work an ideal bedtime companion for those inflicted with insomnia is the obsessive care
the author takes to be absolutely precise, the somewhat antique 1930's British English
employed (though some, including the present reviewer, may see that as one of its charms)
and the regular use of Latin phrases familiar to Keynes and his contemporaries, such as, e.g., "ceteris paribus" (roughly translated "all things being equal", meaningless to American readers whose formative collegiate experience included little in the way of foreign languages of any kind, let alone classical ones. The trick in reading Keynes is to get beyond these inconveniences of packaging and unwrap the very real gift of ideas enclosed. Keynes' economic prescriptions are now so generally accepted, even by most conservatives, certainly including "W", that many of us find it hard to recognize what the argument is all about. These days it is taken for granted that the government has a responsibility to stimulate the economy out of recession, at least to the extent of reducing interest rates, and modestly applying the brakes during overexuberant expansion. It is accepted that two of the factors exacerbating economic downturns are the fearfulness of investors in the face of declining corporate earnings and the reluctance of consumers to to put down money they suspect they may need later if they are laid off from their jobs. It was not always so. Some imagine that Keynes work, along with the massive nineteenth century tomes of Karl Marx, constitute a response to Adam Smith's "Wealth of Nations" a work at least as misunderstood, often deliberately so, as "General Theory...". That is not the case; Keynes hardly ever, refers to Smith and, in any case, those who have read "Wealth of Nations" are well aware that Smith, a truly charming writer quite apart from his undeniable genius, is far more sympathetic to the average worker and much more critical of monopolistic business practices than imagined by those who have deified him but never read him. Instead, the dragons which Keynes sets forth to slay are those who later built a truly "Dark Tower" on Smith's rather benign foundation. Those dragons include, most notably, David Ricardo, Alfred Marshall and "Professor (A. C.) Pigou". Keynes cannot help but admit to the suspicion that these economists' written views on the question of employment, or the more pressing question of unemployment, reflected their identification of the social classes most likely to buy their books; he never states it quite that baldly, of course. It seems almost incredible to us in this age that the prevailing opinion expressed in those writings is that all unemployment, at the organizational if not the individual level, is voluntary; that depressions and large scale unemployment result from the perverse refusal of workers or their labor union representatives to recognize their labor as just another good in the market, subject to a reduced price in the absence of demand occasioned by downturns in economic activity.
One wonders if some of the tolerance for Adolf Hitler manifested by large segments of the British upper and middle classes, and smaller segments of their American counterparts, in part reflected his action on accession to the Chancellorship to reduce German wages by one third all around. Whether that, by itself, increased German employment numbers or simply made economic room for a huge rearmament program that effectively eliminated labor redundancy is a good question ?but for some other essay. Keynes argues quite persuasively that a perception of fairness is essential in a democratic society. (10 points to Adolf for fairness?) Wage reductions in capitalist economies tend to be spotty and opportunistic, rather than universal, typically affecting those who can least afford them. Keynes also argues that they do virtually nothing to solve the problems of the economy, partly because employers may very well decide not to decrease prices comparably and, more importantly, because of cascading effects on overall demand; workers on reduced wages don't rush out to buy new automobiles.
Rating:
Summary: refuted nonsense
Review: Empirically, this book fails badly. Keynes argues that prices and wages do not fall enough in response to reductions in demand. Yet he wrote this in the midst of a massive deflation. Other deflations came and passed without the high and persistent unemployment of the 1930's as well. This obviously proves that his general theory is at best a special case. But it fails as that too. Keynes argued that decreases demand cause persistent unemployment. He denies that monetary policy is as important as spending. Yet, shifts in the money supply correlate well with depressions. Also, at the close of World War 2, Keynesians predicted another great depression in 1946 due to massive decreases in government spending for armaments. They were clearly wrong, and this is very damaging to Keynes' case. If his 'effective demand' hypothesis is correct, there should have been a depression in 1946.The empirical failings of this book should come as no surprise. Keynes paid very little attention to data in this book. Instead, he focused, as the title implies, on theory. Unfortunately, his theory is utterly incoherent. His central hypothsis is his 'Principle of Effective Demand. He lays out the main variables involved here on page 29. This principle supposedly refutes Say's law of Market. Keynes claims that total spending can fail to generate full employment. This happens when total savings exceeds total investment. Keynes throws out a series of supporting arguments in the remainder of this book, none of which hold water. A key supporting argument is that investors will hold cash when interest rates fall. This cash holding supposedly causes demand to fall. The truth is that investors do not hold cash, but instead hold their money in some form of asset in financial markets, even when they are speculating over future bond prices. In the absence of legal restrictions money stays in the financial system and circulates- Say's Law of Markets holds the principle of effective demand fails. Depositors did withdraw money from banks- during the banking panics that began in November of 1930. These panics were an effect of a slowdown that had already existed for more than a year, not the cause of the slowdown itself. Keynes had this causality backwards. He merely refers to the 'marginal efficiency of capital' and ignores the critical issue of time preference. Keynes had capital theory explained to him, personally, by a great economist- Friedrich von Hayek. Yet, he was never able to grasp the simple truth that people save money today, not because of some mysterious "marginal propensity to save", but because they want to defer some consumption to the future and earn interest in the process. In his world, capital markets have no rational basis to them. 'Animal Spirits' drive investing, not expected profits. 'Marginal propensities' drive saving, not intertemporal consumer choice. Instead of addressing these issues in a cogent way, Keynes concocted catchy phrases, like 'the dark forces of time and uncertainty'. Colorful writing is good enough for fiction, but serious social theory needs far more than that. His irrationalist view of markets stands in contrast to his view of government. He merely assumes that public officials will stabilize the economy via some socialization of investment. He seemed to actually believe that government officials seek simply to promote the general welfare, rather than to seek political gain by catering to special interests. His naive view of government clearly contradicts the historical record. The absurdities of this book served as an excuse for increasing government spending to stimulate the economy (rather than to provide basic public services). It also led to expansionary monetary policies that gave us the post war inflations that so many suffered from. The General Theory is second only to Das Kapital in terms of promoting economic failure. This is not because its' ideas were misapplied, it is because it contradicts the reality that it was applied to. Rather than being a general theory, it is peculiar set of incoherent arguments that apply to no time and no place. Today, so called New Keynesians have assured that Keynes' fame will endure a while longer. But when one examines the arguments of these New Keynesians it is quite apparent that they reject the spending approach of Keynes and embrace price and wage theory. The Economics profession has rejected its' nonsensicle arguments, and rightly so.
Rating:
Summary: Keynes's General Theory versus the classical-neo. theory
Review: First,let's write down the core of the classical and/or neoclassical theory Keynes criticized in the General Theory.Let p equal the price level,w equal the money wage,MPL equal the marginal product of labor,mpc equal the marginal propensity to spend on consumption goods,mpi equal the marginal propensity to spend on investment goods(capital or producer goods like machinery,equipment or factories)and mps equal the marginal propensity to save .For the classical- neoclassical theory,the economy is at an optimal state on the boundary of both the static and dynamic production possibilities frontiers if the following equilibrium condition holds for the aggregate labor market:w/p=MPL.For Keynes the condition is w/p=MPL/(mpc+mpi).neoclassical theory is a special case where mpc+mpi=1.Keynes's GT is mpc+mpi<or=1[mpc+mpi is <or= to mpc+mps=1].neoclassical theory is the special case of an econony always operating on the boundaries of both PPF's under resource scarcity so that there is an inverse relationship between consumption goods and investment goods.Only in this special case will classical/neoclassical theory be operational.In a statistical sense,classical/neo. theory assumes that on average the economy is on its boundary.The business cycle would consist of minor inflationary/deflationary gaps which would be self correcting through business inventory adjustment alone.None of this is operational if the economy is operating in the interior of either PPF's.Given the stability of the consumption function, Keynes came to the conclusion that the problem was insufficient long run investment due to a highly volatile and unstable mpi in the private sector.The result is an investment gap.Keynes's solution is not deficit finance but having the public sector borrow the inactive private financial funds at existing very low rates of interest to spend as a special capital account on a continuing series of infrastructure projects which will more than pay for themselves over time.If this policy is opposed then Keynes would be willing to copy the wasteful policy of the Egyptian pharaohs and build a series of pyramids over time.Although wasteful,such a policy would close the investment gap and lead back to the boundary of the static and/or dynamic production possibilities frontier.classical/neo. theory would then be operational as long as the mpi's unstable behavior was continually offset by increased public sector/public goods/infrastructure spending .
Rating:
Summary: Keynes's General Theory versus the classical-neo. theory
Review: First,let's write down the core of the classical and/or neoclassical theory Keynes criticized in the General Theory.Let p equal the price level,w equal the money wage,MPL equal the marginal product of labor,mpc equal the marginal propensity to spend on consumption goods,mpi equal the marginal propensity to spend on investment goods(capital or producer goods like machinery,equipment or factories)and mps equal the marginal propensity to save .For the classical- neoclassical theory,the economy is at an optimal state on the boundary of both the static and dynamic production possibilities frontiers if the following equilibrium condition holds for the aggregate labor market:w/p=MPL.For Keynes the condition is w/p=MPL/(mpc+mpi).neoclassical theory is a special case where mpc+mpi=1.Keynes's GT is mpc+mpi
Rating:
Summary: The Book that refounded economics
Review: Here it is: the masterpiece of 20th century macro econ, and one of the last important books in which the argument advances by reasoning rather than by calculation. An enormous influence on Everybody, it broke new ground by considering things like interest, inflation, money and unemployment: all things which had really had no existence in formal economics before Keynes. It is NOT Keynes' most accessible book, and no doubt he would have changed much had he lived, but everyone, including the new classical economists, owe much of their thought to this volume.During the '80's it became fashionable to deride Keynes, particularly among those who had never read him. Like big purple hair, this fashion seems to have past. But see review below for a throwback.This is the book that created macroeconomics... and asks questions that have retained their interest. What more could one ask?
Rating:
Summary: Keynes is by no means digging holes to fill them up again
Review: Here's a book every economist and everybody interested in economics should read, it's not an easy to read book, but if read carefully, it can show us some problems we are still suffering from in the modern economies and practical ways of dealing with them. Much has been said about this author who has been derided for a long time now, but I bet few have read the man himself, and if he was labeled the greatest economist of the 20th century, he should be respected as such or at least be read before making any comment. Freedom of Choice shouldn't be irresponsible. Remember that the survival of laissez faire may be due to post-war keynesian policies.
Rating:
Summary: May the Voice of the Prophet be Heard
Review: I do realize that very little attention will be paid to this review (it being number 30 something), but I shall persevere in my noble effort to restore some order in the court of economics and public opinion.
After seeing the amount of vitriol hurled at this book I wondered for a second if I have somehow misunderstood it, or carelessly missed a passage in which Keynes urged us to kill babies. No, John Maynard Keynes did not kill babies, nor was he as such disproved (merely disagreed with).
The abuse showered upon him is a clear and unfortunate evidence of the ideological division between (politically) liberal and conservative approach to economics, which in itself is not an exact or precise science (some would say it is not even a science) and lacks sufficient rigor to have anything beyond trivial proved or disproved (I, personally, prefer the phrasing along the lines of "convincingly demonstrate") within its framework. With all this in mind economics quite often provides ample room for opposing views, especially when views are not directly conflicting, except when viewed through polarizing lens of ideology.
The "conservative" economists along the lines of Friedman and Hayek, so frequently mentioned as anti-thesis of Keynes preached (in my gross simplification) free markets and government non-intervention, which while a valid perspective hardly merits a nearly religious fervor.
Keynes, or any other sensible theoretical economist, would agree that free-markets are a good idea in principle, which is seldom if ever realized. Government protectionism (not always bad), monopolies (almost always bad), lack of sufficient incentives and transparency (almost always bad), are a few things that prevent markets from forming and operating efficiently "as if by invisible hand" to use one of the most beat up quotes in all economic literature.
Regardless of Keynes' political conclusions the contribution of this book to the economic theory is invaluable. Prior to him there was no "involuntary unemployment", that is people did not have jobs because they chose not to. As people struggling to find work in this jobless recovery know that is far from the truth.
The dynamics of labor markets were analyzed in a very unenlightening (but orthodox) way of supply and demand. There is a fixed supply of labor, there is a flexible demand for it, cut the wages (that will equalize the market) and everyone will be employed. This concept is remarkably easy to grasp, and is also remarkably worthless, because according to it the demand for labor is a certain "thing in itself" floating in economic vacuum with no relations with the real world.
Mr. Keynes, attempted to establish a functional connection between investment, consumption and employment, which is conventional wisdom now, but apparently was not in 1936. Notions such as "propensity to consume", "liquidity preference" have come of this book to take firm hold in our thinking and have not left yet.
The book itself I have to admit, is not easy to understand, was written by Keynes for his fellow economists, and is peppered with technical terms like "marginal disutility of labor" (roughly translated as "how reluctant am I to work another hour") the "multiplier" (the meaning of which escapes me at the time) and of course the "marginal efficiency of capital" (roughly translates as "if I build another piece of capital equipment, how much money can I reasonably expect it to make"). Keynes has an affinity for Latin terms, and a maddening "will to precision" he is perfectly bent on making sure no detail escapes his attention.
If you are still reading my review, I would recommend this book to a serious scholar of economics (serious in a sense of dedicated), with an adequate knowledge of economic concepts and terminology. Otherwise you will be stumped, frustrated and most of all bored.
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