Explaining Why Americans Want to Keep Keynesian Economics

“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.

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