Let Dead, Defunct Economists Stay Dead

I gave a talk at the Heritage Foundation and the subject of economics and policy came up. I’ve been dwelling on this 2009 article in the New Zealand Centre for Political Research Weekly and I think it is relevant today too.I stumbled onto it a couple of weeks ago and think it makes a worthwhile point — we keep digging up these dead and defunct economists like Karl Marx and John Maynard Keynes and we need to put them back in the grave and keep them there.Now, a friend of mine at the Heritage event today said I said something about killing the Keynesians. If so I misspoke. We need to keep the living Keynesians around somewhere to remind us constantly why they are so terrible. It is John Maynard and Karl themselves we need to permanently put six feet under.We keep having the problems we’re having because people forget. They forget just how terrible the economic policies of Keynes and Marx actually are and inevitably after a twenty year gap or so they come back in full force and screw things up again.They’re zombies.Consider this bit from the article:

A landmark event in economic history was the open letter signed by 364 British economists in March 1981 protesting against the Thatcher government’s (non-Keynesian) economic policies.Its most telling paragraph read: “Present policies will deepen the recession, erode the industrial base of our economy and threaten its social and political stability.”Ironically, the economy began to recover at that very time (March 1981), and the upturn extended to mid-1990.

As the article notes, Keynes himself said, “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” Consistently in government, Keynes is the defunct economist.The question I was asked at Heritage today was about how I’d respond to Obama and those who say that but for the stimulus the economic situation in the country would be far worse.I’d say that the prescription was wrong and the fact that we are still in a slump with massive unemployment is proof positive that yet against Zombie Keynesian continues to steer government bureaucrats off the rails and keep us in a rut. We don’t need a bigger stimulus, we need a different plan altogether.If we’re going to dig up the dead, let’s dig up Milton Friedman and Adam Smith. Keep Keynes in the grave.

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