But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Taken from The General Theory of Employment, Interest and Money pg 383 by John Maynard Keynes
As far as I am concerned what you are about to read can only be described (in the British vernacular) as ‘brilliant’. Brian manages to bring to life the times and importance of Keynes in his introduction to The General Theory taught as a 4th year seminar course at the University of Guelph. It should be read by all who love or hate Keynesian economics. (Those who don’t really care are of course exempt.) If you are interested at all, you will find this text a pleasure to read.
See SSRN downloads for all of his lectures
Lectures on Keynes’ General Theory by Professor Brian Ferguson winter 2013:
Lecture 1: Chapter One, Background and Historical Setting
John Maynard Keynes’ General Theory of Employment, Interest and Prices is one of those rare books which actually deserves to be labeled revolutionary. Regardless of one’s take on Keynesian macroeconomics, the publication of the General Theory marked a major change in the way economists thought about macroeconomic issues. Indeed, Keynes can be credited with (or slammed for) creating the concept of macroeconomics. Arguably, prior to the General Theory, most professional economists thought of the macroeconomy in a general equilibrium sense, as an aggregate of a large number of individual markets, and they assumed that the analysis of how individual markets behaved could be carried over pretty much unchanged to the collection of markets which constituted the economy as a whole. There was, it seemed, no need to think of the economy as anything other than the sum of its parts, and an understanding of how those parts worked was sufficient to understand how the economy as a whole worked. After the General Theory, that no longer held. Economists started to think in terms of aggregates.
The idea that economic crises, like the current financial and housing crisis, are mainly caused by changing thought patterns goes against standard economic thinking. George A. Akerlof and Robert J. Shiller Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism page 4
I think every right-wing thinking person should read this book. For one thing, it cogently argues left-wing policies in a way that an author like Naomi Klein can only dream about. In other words, the arguments actually make sense.
The title is an homage to the book The General Theory of Employment, Interest and Money by John Maynard Keynes (See our guest blogger for more). In The General Theory, Keynes attributed much of market movements to the desire to ‘just do something’ rather than the result of rational thinking on anyone’s part. This book gives academic form to what those nebulous animal spirits might look like. Akerlof and Shiller identify 5 psychological concepts which leads to results that look like decisions were made by animal spirits rather than rational human beings. They are:
You are in for a treat. A collegue of mine (who wishes to remain anonymous) will take us through Keynes’ General Theory chapter by chapter and almost line by line. You are in for an education!
It’s really unnecessary to say that there’s been a revival of interest in John Maynard Keynes General Theory of Employment, Interest and Money in recent days. The trouble is that the level of public discourse on Keynes has basically been something along the lines of “Keynes wrote about bad times, we’re in bad times, so Keynes’ theories must be right”. The revived Keynesianism often seems to amount to no more than a blanket call for government spending, in many cases a call made by people who always seem to be able to find some reason or other for governments to spend more. In bad times it’s to pull us out of recession, in good times it’s to stimulate growth and ensure social justice (especially if accompanied by taxes on dis-favoured groups). In any event, this seems like a good time to take a look at what Keynes actually said in the General Theory, if only because there seems to be a certain disconnect between what some people think he said and what he actually said.