John Maynard Keynes

Englishman, gentleman, scholar. The most famous and important economist since AdamSmith. I think Marx is more famous, and probably more important. A much worse economist, though. Wrote the GeneralTheoryOfEmploymentInterestAndMoney, the first book that separated microeconomic reality from the "symbol economy" of money, credit, inflation, and the role of fiscal & monetary policy as a means to influence the economy.

Keynes' general ideas have withstood the test of time, but many aspects of his theory have been called into question over the last few decades. Relatively few economists are purely "Keynesian" in their viewpoint nowadays, though his legacy is still felt.

According to one late professor of mine, what has "been called into question over the last few decades" is the misrepresentation and simplification of the original, pretty obscure Keynesian ideas by Hicks. What is normally called "Keynesian politics", namely deficit spending, is what Keynes recommended to counter a decline in demand. If the cause of the economic low stems from a decline in supply, which is probably closer to today's situation, Keynes' original theories (NOT the representation by Hicks) would suggest lifting taxes on companies and income.

I'm not sure how much these ideas are a minority opinion (he presented them as such); alas, said professor was as much a drunkard as (IMHO) a genius, and I don't think he was able to effectively spread his ideas. --FalkBruegmann

Indeed, this is my impression as well. Keynes is all too often mischaracterised, even by rather well-known & competent economists. Frederich Hayek, for instance, said that "Keynes' ideas are to what we owe the high unemployment & inflation levels of the 3rd quarter of our century," in one of his recent books (The Fatal Conceit). Well, to me, that's sort of like blaming Einstein for the atom bomb. --StuCharlton

CategoryScientist