Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts [Paperback]

Hunter Lewis (Author)

Book Description

Publication Date: September 16, 2011

In responding to the financial crash of 2008, both the Bush Administration and the Obama Administration have relied on prescriptions developed by John Maynard Keynes, the most important economist since Marx. But should we be relying on Keynes? What did Keynes actually say? Did he make his case? Hunter Lewis concludes that he did not. If Keynes was wrong then so are the economic policies of virtually all world governments today.

Editorial Reviews

Review

"Just what the world needs, and just in time. Keynes is demolished and his quack system refuted. But this wonderful book does more. It restores clear thinking and common sense to their rightful places in the economic policy debate. Three cheers for Hunter Lewis!" — James Grant (Editor of Grant's Interest Rate Observer)

“…[An] impassioned…and…much needed book.” —Gene Epstein (Barron's)

From the Publisher

Among Top Seven Books Recommended Year End by Barron's Economic Editor.

Among Top Five Finance and Economics Books 2009 Recommended by 800-CEO-Read --This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 387 pages
• Publisher: Axios Press (September 16, 2011)
• Language: English
• ISBN-10: 1604190442
• ISBN-13: 978-1604190441
• Product Dimensions: 6 x 1 x 9 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (45 customer reviews)
• Amazon Best Sellers Rank: #276,991 in Books (See Top 100 in Books)

More About the Author

Hunter Lewis was born in Dayton, Ohio, USA, in 1947 and graduated from the Groton School and Harvard University (AB 1969). After working at the Boston Company, then one of the largest investment managers, first as assistant to the president and then vice-president, in 1975 Lewis co-founded and served as co-chief executive and then chief executive of Cambridge Associates LLC, an investment advisor to research universities and colleges representing over three-quarters of U.S. higher education endowment assets, foundations, cultural organizations, international organizations and other non-profit institutions as well as families. Cambridge Associates is now a global firm with offices and clients around the world.

In addition to his work at Cambridge Associates, Lewis has served as treasurer and president of the American School of Classical Studies at Athens, a graduate research institute affiliated with 150 American colleges and universities, president of the Alliance for Natural Health-USA, chairman of the National Environmental Trust, chairman of Dumbarton Oaks (affiliate of Harvard University), founder and chairman of the Trearne Foundation, which provides educational assistance to foster children, chairman of the Worldwatch Institute, chairman of Shelburne Farms, treasurer of the World Wildlife Fund (World Wide Fund for Nature), trustee of World Wildlife Fund International, member of the Advisory Board of Environmental Health Sciences, trustee of the Morgan Library, trustee of the Rockefeller Brothers Fund, trustee of the Thomas Jefferson Foundation (Monticello), trustee of the Peabody School, trustee of the Groton School, trustee of the Core Knowledge Foundation, and member of the World Bank Pension Finance Committee.

Lewis has contributed to many newspapers and periodicals including the New York Times, the Times of London, the Washington Post, and the Atlantic Monthly, as well as numerous websites such as Forbes.com. He is also an author and editor of books on economics and moral philosophy. His works include: Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts (Axios Press; September 25, 2009), Are the Rich Necessary?: Great Economic Arguments and How They Reflect Our Personal Values (Axios Press; September 25, 2007; Rev Updated PB edition October 30, 2009), A Question of Values : Six Ways We Make the Personal Choices That Shape Our Lives (Harper Collins, 1990, Axios Press, Rev Updated edition May 25, 2000), The Beguiling Serpent (Axios Press; August 31, 2000), Alternative Values: For and Against Wealth, Power, Fame, Praise, Glory, and Physical Pleasure (Axios Press; July 25, 2005) and The Real World War (Coward, McCann & Geoghegan/Putnam; 1982).

Most Helpful Customer Reviews

44 of 48 people found the following review helpful

5.0 out of 5 stars A much needed refresher on Keynesian economics...straight from Keynes himself. January 17, 2010

By Warren R. Grayson

Format:Hardcover

I don't believe that any of the people who have thus far written negative reviews for this book have actually read the book; I very much enjoyed it. "Where Keynes Went Wrong may be thought of as the book that [Henry] Hazlitt [Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics] initially planned to write, or at least something along similar lines. It does not follow Keynes page by page, but rather concentrates on a few key topics. It is meant to be understandable by almost anyone, whether or not a student of economics." The text in reference is John Maynard Keynes - The General Theory of Employment, Interest and Money. And while the great majority of Keynes quotes come from General Theory, Lewis also draws from contemporary news articles, correspondence's and acquaintances recollections.

I suppose the greatest compliment I can pay to this book is this: the title is very accurate. Hunter Lewis performs a great service for the general reader by explaining exactly why there are flaws in Keynes logic, where the flaws are specifically in his work and what the practical flaws are in Keynesian economics. In doing so, Lewis draws much support from preeminent economists Ludwig von Mises - Human Action: A Treatise on Economics and F. A. Hayek -The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek); with honorable mentions going to such men as Adam Smith - The Essential Adam Smith, J.S. Mill The Basic Writings of John Stuart Mill: On Liberty, the Subjection of Women and Utilitarianism and Murry Rothbard - Man, Economy and State A Treatise on Economic Principles (Volumes I & II) to name just a handfull.

In conclusion, I think this book is quite good and I highly recommend it. I would point the reader to another book (Ellen H. Brown: Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free), which might give an interested reader a great history and grounding to much of what Hunter Lewis addresses in this book. Lastly, "It is also important to emphasize that the full Keynesian program of cheap money and large-scale government spending (along with occasional add-ons such as protectionism) remains to this day merely a hypothesis. Each time it has been applied, whether by the Roosevelt administration during the Depression, the Japanese government after the bubble of the late 1980's, or the second Bush administration (working with the Greenspan Fed) after the dot-com bubble, it has not produced the hoped for results. There are indeed good reasons to thing that is has caused the very problems it was meant to prevent or cure."

131 of 152 people found the following review helpful

5.0 out of 5 stars Keynes Debunked and Demystified September 12, 2009

By Robert M. Blumen

Format:Hardcover

The first section What Keynes Really Said consists of short excerpts from Keynes' own books, mostly The General Theory. Lewis sets out to provide the reader with a fair and unbiased understanding of Keynes' views. Going back to the source is a worthwhile endeavor because most people know what they know through a macro textbook using a second or third-generation graphical synthesis of Keynes' idea, or through media buzzwords such as "stimulus" and "consumer confidence".

The second section, Why Keynes Was Wrong mirrors the structure of the first section. In the table of contents, the two sections are lined up in vertical columns. For example, a section in the first part called Spend More, Save Less, and Grow Wealthy is lined up against a section in the second part called Spend More, Save Less, and Grow Poorer.

There are several main themes in book. One is that most of Keynes key doctrines are paradoxical. The most well-known example is the paradox of thrift: saving is good for the individual but if everyone tries to save, then it drives the economy downwards into a bust. Another example is "unemployment equilibrium". In each case, Lewis provides simple, logical arguments against Keynes's paradoxes. The book could be characterized as a defense of common sense against obscurantism and muddle-headedness.

Keynes' reliance on paradox brings to mind what philosopher Michael Levin calls "the skim milk fallacy", which he describes as follows: "According to this paradigm, science always shows that things are the reverse of how they seem. Deep scrutiny of virtually any phenomenon will reveal that everyday convictions about it are wrong. In fact, taking things at face value betrays naiveté, while readiness to debunk is the mark of the sophisticate, what David Riesman called an 'inside dopester.'"

Another theme is Keynes' reliance on his own opinion without any supporting facts. Lewis gives many examples of how Keynes moves through a point in his reasoning that cannot be decided on purely theoretical grounds by recourse to pure opinion without any empirical support. Lewis in some cases cites subsequent empirical studies that contradicts Keynes' opinions (and in other cases, Lewis provides a common sense argument against Keynes' opinion). Where some empirical work existed at the time, Keynes would dismiss with no supporting evidence if he needed things to go in the opposite direction in order to arrive at the result he wanted.

This book fills a missing niche in the literature: a debunking of Keynes for the general reader. I believe that this book would also be useful as a supplement in a macro course. But its most important contribution in my view is that it demystifies Keynes. The ideas in The General Theory form the foundation of modern macro-economics, which is the basis for the modern practice of central banking and pretty much all monetary policy around the world. What I mean by the mystification of Keynes is that, because his theories are so long-established and deeply embedded in academic economics, government, and the public consciousness, it is difficult not to think that there must be something really deep and profound there. Upon reading Lewis' book, it is somewhat shocking to see how weak his arguments are and how poorly they stand up to any kind of logical examination.

47 of 54 people found the following review helpful

5.0 out of 5 stars What Keynes Really Said January 9, 2010

By T. M. Smith

Format:Hardcover

While I am myself a Democrat, and I gather that some reviewers thought the book bashed Obama and the Democrats,I thought Lewis's point is that government economic policies are generally based on Keynesianism, regardless of the party in power. In any case, for me the real value in this book is that Lewis uses Keynes's own words to show what Keynesian economics was really all about, in a way that is so much more readable than Keynes himself.