Indeed, the whole point of The General Theory was about preserving what was good and necessary in capitalism, as well as protecting it against authoritarian attacks, by separating microeconomics, the economics of prices and the firm, from macroeconomics, the economics of the economy as a whole. In order to preserve economic freedom in the former, which Keynes thought was critical for efficiency, increased government intervention in the latter was unavoidable. While pure free marketers lament this development, the alternative, as Keynes saw it, was the complete destruction of capitalism and its replacement by some form of socialism.That comes to my attention via Mark Thoma. For related thoughts, see this earlier post.
Saturday, August 15, 2009
Keynes as Conservative
In his Forbes column, Bruce Bartlett makes the case that Keynes was a "conservative." He wasn't in the contemporary American political usage of the word, but in the term applies in a more literal sense. Keynes saught to protect the capitalist system from the more radical alternatives of fascism and communism, which were real threats at the time. Bartlett writes: