Dissent on Keynes: A Critical Appraisal of Keynesian Economics [Hardcover]

Mark Skousen (Editor)

Book Description

ISBN-10: 027593778X | ISBN-13: 978-0275937782 | Publication Date: March 30, 1992

Keynesian economics is not dead but is alive and kicking in the U.S. and elsewhere. However, Keynesian economics has caused the U.S. and other countries under its influence to suffer inflation, economic instability, excessive debt, overconsumption, and underinvestment on a serious scale. Meanwhile, many Far Eastern and European countries have rejected Keynesian-style economics and are rapidly surpassing the U.S. in economic growth. This edited volume is the first and only modern work to attack Keynesian economic theory, which is at the root of many of the U.S. economic problems. The contributors of this volume analyze the main tenets of Keynesianism--the multiplier and accelerator, the Phillips curve, the paradox of thrift, Keynesian development theory, progressive taxation, deficit spending and countercyclical demand policy, and post-Keynesianism. They demonstrate that it represents not only bad economic policy but bad economic theory, fraught with fallacies and errors. The work also offers a revisionist view of Keynes, the man, both as an economist and an investor.

Editorial Reviews

About the Author

MARK SKOUSEN is Adjunct Professor of Economics and Finance at Rollins College in Florida and editor of Forecasts and Strategies, an investment newsletter.

Product Details

• Hardcover: 264 pages
• Publisher: Praeger Publishers (March 30, 1992)
• Language: English
• ISBN-10: 027593778X
• ISBN-13: 978-0275937782
• Product Dimensions: 9.1 x 6.1 x 0.9 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #7,016,377 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

5.0 out of 5 stars Excellent, December 11, 2008

By 

Rothbardian - See all my reviews

This review is from: Dissent on Keynes: A Critical Appraisal of Keynesian Economics (Hardcover)

"Dissent on Keynes" is an excellent collection of essays attacking Keynesian economic theory. The book is comprised of twelve essays by prominent free market thinkers like Murray N. Rothbard, Roger Garrison, Jeffery Herbener, David Gordon, and Hans-Hermann Hoppe.

Jeffery Herbener's chapter on the multiplier is essential reading for anyone interested in economics. The fallacious multiplier was Keynes's masterstroke, and Herbener destroys it. Herbener shows there is no theoretical reason to believe that the MPC is between one and zero (0<MPC<1). The Keynesian categories of Y, C, and I are FLOWS. This means that these categories are measured over a period of time, and are added to the STOCK of existing accumulated capital. C can exceed Y if society decides to consume all its income and some existing capital. The MPC can be 1, greater than 1, or negative, and this creates big problems for Keynesians (At the end of this chapter, Herbener provides a table from the Economic Report of the President demonstrating empirically that the MPC has been greater than 1 and negative). More fundamentally, Keynes's use of ex post facto accounting categories (C, S, I, and Y) cannot lead to a "general theory" because they are sums of money. Money would disappear in long run general equilibrium (ERE). These accounting categories are incapable of even explaining a barter economy.

Hans-Hermann Hoppe's chapter is the best comprehensive treatment of Keynes found in this book. Hoppe reminds us that all unemployment is voluntary. Money would not exist in the ERE, so Keynes theory of Money and Interest is fallacious. In the "The Fallacy of the Phillips Curve" Herbener demolishes the widely accepted notion of a trade-off between unemployment and inflation. Egger's chapter is an excellent discussion on deficit spending and property rights. David Gordon offers an exceptional critique of Keynes's faulty theory of probability. Gordon states that Keynes's inductive theory of probability presupposes the validity of inductive logic, but Keynes could not prove the validity of induction without using induction. Roger Garrison's essay on Milton Friedman seemed a bit out of place. Considering Garrison's prestige, it's unfortunate that his chapter wasn't geared towards a more fundamental theoretical criticism of Keynesian theory. Still, Garrison's chapter is great and illustrates the inadequacy of the income/expenditure approach. Murray Rothbard offers a fantastic glimpse into Keynes's life and shows that Keynes was anything but a commendable human being.

The other reviewer has done a poor job of reviewing this book and failed to discuss any of the book's content. Although maintaining a low fixed rate of interest was advocated by Keynes, the reviewer is incorrect to insist that it was his main policy proposal. Keynes's main policy proposal was the socialization of investment. Keynes said: "I should regard state intervention to encourage investment as probably a more important factor than low rates of interest taken in isolation" (CW, vol. XXVII, pg. 350).

Unfortunately, this book is expensive. However, an electronic copy is available for free on the Mises Institute Website. I highly recommend this book.

2 of 12 people found the following review helpful:

3.0 out of 5 stars Keynes was not a Keynesian, June 18, 2007

By 

Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: Dissent on Keynes: A Critical Appraisal of Keynesian Economics (Hardcover)

This is a book of collected essays written by libertarian,anarchist economists like Murray Rothbard,Hans-Hoppe,Roger Garrison,Mark Skousen,and Gordon. These authors argue that Keynesianism can be traced directly back to Keynes's 1936 work,The General Theory.The basic argument is that Keynes was in favor of deficit financing,budget deficits,tax cuts,an activist fiscal policy,the Phillips curve analysis of a supposed policy capability of trading off % changes in money wages(later prices were substituted for wages) versus % changes in unemployment,incomes policies,etc.Contrary to these authors speculations,Keynes never supported any of the policies identified as Keynesian.It is true that Keynes supported progressive taxation as did Adam Smith.It is true that Keynes supported maintaining low,fixed rates of interest as did Adam Smith.It is true that Keynes supported a policy of skewing credit and commercial bank loan availability away from projectors,prodigals,and imprudent risk takers and toward sober individuals who would make productive use of the loans to increase the wealth of nations by increasing physical,durable capital investment and jobs instead of creating speculative bubbles that impose immense negative externality and spillover costs on the average citizen as did Adam Smith.It is true that Keynes supported retaliatory and revenue tariffs as did Adam Smith.The fundamental problem with these essays is that all of the writers would completely reject the wisdom of Adam Smith, a conservative who would have supported the Federalists(Hamilton,Washington,Madison,Franklin,the Adams Brothers,etc.)in their battles with the libertarian,anarchist Anti-Federalists(Mason,Randolph,Paine,Henry,Jefferson,etc.)

We can now summarize Keynes's major economic policy proposal-fix and maintain low rates of interest for productive borrowers permanently and prevent Wall Street speculators(Smith's projectors)from screwing up the economy.Nowhere in any of these essays is the actual policy proposals made by Keynes in chapters 22,23,and 24 of the GT ever considered.I recommend the book because it shows that these authors never read all of the GT.Keynes's policy proposals in chapters 22-24 are simply ignored.The writers of these essays also never read all of Adam Smith's Wealth of Nations either.However,if they had taken the time to actually read what it was that Smith wrote,they would oppose Smith as virulently as they oppose Keynes because Smith,like Keynes, was well aware of the problems of market failure,externalities, and insufficient investment in public goods and infrastructure projects that benefit society as a whole.Smith,like Keynes,understood only to well the dangers resulting from the speculative use of bank loans to support the creation of bubbles in financial markets.Smith realized that loans to speculators were "... savings that were wasted and destroyed.." and did not contribute to productive wealth creation.This fundamental finding has been ignored for more than two centuries by economists in general and especially the economists in this book.