It is more instructive to inquire why Keynes put forward this extremely complicated and implausible theory. And here we may have to answer that, siding as he did with the immemorial labor-union insistence that employment is not caused by excessive wage-rates, he had to come up with some theory as to what does cause it. And as he couldnt blame the labor-union leaders, what more natural (and politically convenient) than to blame the moneylenders, the creditors, the rich? Like Marxism, this is a class theory of the business cycle, a class theory of unemployment. As in Marxism, the capitalists become the scapegoats, with the sole difference that the chief villains are the moneylenders rather than the employers. And that, I suspect, rather than any new discoveries of technical analysis, is the real secret of the tremendous vogue of the General Theory. It is the twentieth centurys Das Kapital. Henry Hazlitt, The Failure of the New Economics, Chapter 19, p.287
Posted on: Fri, 23 May 2014 21:08:38 +0000
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