There is a certain self-righteousness about Keynesians which I have never heard of about Keynes himself.
John Kenneth Galbraith was obsessed with how other people spend their own money. He would lament that a family is spending too much on a big house, when their money could have been used for some other purpose like creating jobs for teachers in the public sector.
Similar thing one can notice about Paul Krugman who laments that stock market people “speculate” too much, and their transactions should be taxed to curb their speculation, and be put into more pressing federal needs. I wonder - has that man ever put his money in the stock market? Is he in any position to decide what others should do in the market with their own money?
Somehow, Keynes was a bit more relaxed, and if Hayek was right, he wasn’t exactly a bad guy at all, just flawed in his analysis.
Interestingly, Hayek even considered Keynes to be closer to English classical liberals, which is ironic, considering that the Keynesian school has gone beyond its desire for full employment and aggregate demand, and into left-wing political activism. Not necessarily a bad thing, but do they realize that Keynes would be nowhere near them on the political spectrum? Do they realize Keynes had entirely different intentions than deciding how people should or should not spend their money in the name of the greater good?
I wouldn’t agree that Keynes would find the current tone of Keynesians all that preposterous. I tend to agree with Hayek that he was a descendant of British classical economics, and above all that he would find the modern advocacy of inflation that is being thrown around ‘in his name’ insane, but these are all differences of degree not kind.
I suspect Keynes focused on fiscal and not monetary policy simply because back in his days the west had a kicking economy, and could well afford his schemes. Today’s West is in rags.
Rothbard has a nice mp3 about what a nutjob he was.
Here’s what D. H. Lawrence had to say about him:
" We went into his rooms at midday, and it was very sunny. He was not there, so Russell was writing a note. Then suddenly a door opened and K. was there, blinking from sleep, standing in his pyjamas. And as he stood there gradually a knowledge passed into me, which has been like a little madness to me ever since. And it was carried along with the most dreadful sense of repulsiveness—something like carrion—a vulture gives me the same feeling. I begin to feel mad as I think of it—insane."
Yes, I think his ideas have been taken, first and foremost, out of context. He wasn’t developing a tool set for countries that already had government spending at…what like 15 percent of GDP or whatever it is and where the national debt was already through the roof.
To be fair though, after reading Where Keynes Went Wrong, it’s apparent that Keynes did have some very wacky things to say in his General Theory and he really didn’t give any caveats to readers so it’s not as if he really went out of his way to avoid being taken out of context.