Liveblogging World War II: February 12, 1943
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Hoisted from the Archives from Four Years Ago: Tracing Wingnuttery Abuout John Maynard Keynes Back to Henry Hazlitt Weblogging

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Brad DeLong : The Agenda with Steve Paikin: Rethinking Keynes: I am looking for is a good survey of where the wingnut idea that John Maynard Keynes did not care about the long run came from.

It is not true. Even the General Theory Keynes thought of as a book that was at least as concerned with the long run than the short run--the idea that the Keynesian model is about the short run and the classical model about the long run is a post-1947 creation of the MIT- and Yale-based neoclassical synthesis. Keynes throughout his writings worries about Malthusian forces, about the economic possibilities for our grandchildren, about secular stagnation, and about a host of other long-run issues.

The standard quote from Keynes used to show that he cares only about the short run--"in the long run we are all dead"--comes from Keynes's Tract on Monetary Reform. In context, the quote is the centerpiece of an attack on those monetary economists who suppose that, because monetary policy is neutral in the long run, economists do not have to do any work to figure out what monetary policy does in the short run.

They are, he says, avoiding work: setting themselves "too easy, too useless a task":

Now 'in the long run' this [way of summarizing the quantity theory of money] is probably true…. But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.

The source of the claim, as far as I have been able to trace it, is the fifth paragraph of overrated wingnut Henry Hazlitt's 1946 book Economics in One Lesson:

Paragraph 5: There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom...

Not the absence of Keynes's name from Hazlitt's book. Hazlitt's reason for doing so are:

Economics in One Lesson, Preface to the First Edition.: I have thought it still less advisable to mention particular names.... To do so would have required special justice to each writer criticized, with exact quotations, account taken of the particular emphasis... qualifications he makes... ambiguities... and so on. I hope, therefore, that no one will be too disappointed at the absence of such names as Karl Marx, Thorstein Veblen, Major Douglas, Lord Keynes, Professor Alvin Hansen and others in these pages. The object of this book... economic errors in their most frequent, widespread or influential form.... I hope I shall not be accused of injustice on the ground, therefore, that a fashionable doctrine in the form in which I have presented it is not precisely the doctrine as it has been formulated by Lord Keynes...

Shorter Henry Hazlitt: if I don't name names, I can get away with misleading summaries and sloppy research.

I haven't been able to trace it back any further than Hazlitt.

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