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The Critics of Kenesian Economics

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Hazlitt edited this 1960 volume of early reactions to Keynes at a time when most economists were devout Keynesians. For the most part this book is a colleting of writings by Keynes' earliest critics. It also includes a chapter by JB Say. There are several things to note about this book. It is interesting for the largely purposes of History of Economic Thought. The Keynesian paradigm that prevailed in 1960 is now stone dead. Nobody believes in a stable Philips curve anymore. The Modigliani chapter is part of that era when the old Keynesian paradigm was still taken seriously.

Most of the authors go further back to Keynes himself. Mises and Hayek are always interesting to read, and Keynes deserved to be critiqued at that time. But Keynes' book is rarely read by economists nowadays. Though many economists still refer to themselves as Keynesians, few of them know anything about Keynes' own ideas. The General Theory of Employment, Interest, and Money is a dead horse, let it rest.

It seems odd that this volume contains not even one thing written by Milton Friedman. Yes, I know, we Austrians have some disagreements with Friedman, but we have disagreements with Frank Knight too, and Hazlitt included a Knight chapter. Of course, Friedman did not rise to real prominence until after this book came out. But the more recent edition of this book might have included something from Friedman, perhaps his paper on long and variable lags. It would be nice to see something on Political Business cycles too.

In any case, the arguments of this book do not apply all that directly to the New Keynesian paradigm, as developed by Stiglitz, Akerlof, Mankiw and others. So you should read it while remembering the context in which it was edited. This is a good book for those who want to understand more about the early debate over Keynesian economics. Look elsewhere for material on the current debate in macroeconomics.

This simply cannot be over-stated: this book is fundamental for all students of economics. It debunks Keynes and show just how completely absurd his thinking is, often bordering on mysticism and magic ("Inflation can turn stones into break").

The previous review that claims that the critics of Keynes didn't understand his mathematical model would be funny if it wasn't so sad to imagine anyone would be so much in love with an absurd theory as to look for desperate ways to defend it.

Among the critics, there are some of the best economists of the 20th century, including Nobel Price winner Friedrich von Hayek, hardly people who would find it challenging to understand Keynes' math.

Besides, this just proves another point: if an economic theory cannot be put into clear and concise words, the best math in the world won't save it. Nonsense is still nonsense even when it tries to hide in complex formulas. Of course math cannot contradict logic and Keynes theories were extremely illogical, which is exactly what this book proves beyond any doubt.

this book has just received by me on mar.,1,2011, it is too long time for me to wait for. Anyway, the book ordered has arrived, to join my references on keynes study.
thank amazon.com for all the way.

Every scientist has a model which is used to show or demonstrate how the main variables that had previously been defined and discussed in the earlier stage of theory construction interact.The scientist applies the theory through the use of the model.A critic of a theory must demonstrate that the model used by the scientist is inadequate or inferior because he has omitted a relevant variable or factor or because he has misspecified the model to include variables or factors which are not relevant.A critic can also show that errors or mistakes have been made that render the model inappropriate for use until the model has been corrected.Hazlitt,the editor of this volume of collected essays,and the essay contributors have absolutely no idea of what the formal,mathematical model that Keynes constructed in the General Theory(1936)is or where in the GT it can be located.All the criticisms are based only on particular obiter dicta made by Keynes in supplementary literary comments.In May of 1935,Keynes told Dennis Robertson that his model,The Employment Function, was not in the first 17 chapters of the GT.In spite of this,Robertson continued to claim that Keynes's model was contained in pp.24-30(chapter 3 of the GT).Later economists claimed that his model was located in footnote 2 on pp.55-56 of the GT or on p.44.Any reader of the GT can easily locate the chapter in which Keynes's model appears.Chapter 20 of the GT is called "The Employment Function".Keynes analyzes the output and labor markets in this chapter.In chapter 21 he adds the money market.In the appendix to chapter 19,after stating the major result of the GT on pp.261-262 of the GT,that full employment required the macroscopic optimality condition that mpc+mpi=1 if the capital stock is suboptimal or mpc=1 if the capital stock is optimal, in addition to the usual optimality condition that w/p=mpl,where mpc is the marginal propensity to spend on consumption goods,mpi is the marginal propensity to spend on investment goods,mpl is the marginal product of labor derived from an aggregated neoclassical production function,w is the money wage,p is the expected price level, and w/p is the expected real wage,Keynes compares and contrasts his theory with that of Pigou's that was specified in Pigou's 1933 masterpiece,The Theory of Unemployment.None of the authors of any of the essays in this book ever get to chapters 19,20,and 21.Any sound type of scientific criticism is thus impossible.A much,much better book to purchase is the recent 2001 book by Roger Garrison.He has some idea of what Keynes's model was.None of the authors in this book have any idea at all.