Keynes the Man: Hero or Villain? | Murray N. Rothbard

Lecture presented by Murray N. Rothbard at the Ludwig von Mises Institute’s “Keynes and Keynesianism” seminar; Harvard Square, Massachusetts, April 28-29, 1989.

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Source: On John Maynard Keynes | by Murray N. Rothbard – YouTube

http://www.readrothbard.com/keynes-the-man-hero-or-villain-murray-n-rothbard

TRANSCRIPT
00:00
first of all I want to launch a
00:01
preemptive strike against any critics I
00:05
might accuse this talk of being at home
00:09
on them first place the ad hominem
00:12
fallacy is that you attack instead of
00:14
attacking the doctrine of the person
00:16
you’re attacking a person and that’s
00:19
fallacious because it doesn’t that
00:21
doesn’t refute the argument I’ve never
00:22
been in favor of that I’ve always been a
00:24
favor of refuting the doctor and then
00:26
going on to attack the person it’s not
00:31
an ad hominem fallacy ah also what I’m
00:35
going to talk about the person Cannes I
00:36
think it’s related directly to his ideas
00:38
and so I think it’s also important
00:41
historically what sort of a person he
00:42
was and had that bid relate to his ideas
00:46
okay first I’m going to start by saying
00:48
the Keynes’s favorite political
00:49
philosopher might surprise many of you
00:52
so it was it was Edmund Burke an
00:57
interesting question why does admin
00:58
Burke why here’s somebody with the
01:00
Edmund Burke the darling of conservatism
01:03
neoconservatives or whatever and he was
01:06
Keynes it was certainly not conservative
01:08
in that sense one would think uh he
01:11
liked that he was a little bit more
01:12
democratic than Burke he fell for it was
01:15
an 18th century working an eighteenth
01:17
century political system which was
01:19
hardly democratic so if you’re more
01:21
democratic than Burke doesn’t say much
01:23
he was also thought that Burke left out
01:26
some like great political ideas are
01:27
great ideologies that statesmen should
01:29
pursue but the three basic reasons why
01:31
he liked Burke a lot
01:33
we’re precisely by whites we basically
01:35
reason why I dislike Burke first place
01:40
he liked the fact that Burke was opposed
01:42
to abstract principles Keynes always
01:45
hated principle goal with life he said
01:47
one time he’s suddenly – in the speech
01:49
or testimony
01:50
I’m afraid of principle per se and heave
01:54
against principle in particular is
01:56
against individual rights and for us
01:58
Burke was against individual rights
01:59
Percival Burke believe in expediency
02:01
against the against abstract natural
02:04
rights and this is one of the great
02:06
reasons why chains like them now the raw
02:09
certain Burke’s theorists will claim
02:10
that Burke really did believe and
02:13
your rights I don’t agree with them the
02:14
point is I’m talking but why canes like
02:16
Burke
02:19
so canes like Burt won because he’s
02:20
against principles and particularly
02:22
against abstract individual rights to
02:26
you like Burke because Burke was in
02:29
favor of focusing on present and present
02:32
goods and ignoring future benefit future
02:35
goals but was birth conservatism the
02:38
fact that Burke didn’t like the idea of
02:39
any kind of change or radical change
02:40
because he worried about future
02:42
consequences which we wouldn’t know this
02:44
is a short-term position of course that
02:46
this is fits in with Keynes’s admiration
02:48
for the short run and hatred of the long
02:50
run so Keynes’s ideas a little run rule
02:52
dead fits in with a Burkean idea you
02:55
should concentrate on current present
02:56
questions or present costs and not worry
02:59
about not consider future benefits too
03:01
much so in other words Burke essentially
03:04
Burke’s political philosophy was a high
03:05
time preference philosophy as was
03:07
Keynes’s whole outlook which is very
03:10
much a favor present benefits present
03:13
goods as against future as Keynes put a
03:17
quote it is the paramount duty of
03:19
governments and of politicians to secure
03:22
the well-being of the community under
03:24
the case in the present and not to run
03:27
risks over much for the future so the
03:30
president orientation fits in that they
03:32
were changing the short-run orientation
03:35
thirdly admire the fact that Burke
03:38
believed and ruled by an organic
03:40
organically arrived at elite a ruling
03:43
class ruling a leader British
03:45
establishment big shots of course since
03:47
Kings was a British that was a big shot
03:49
it’s fit in beautifully with Keynes’s
03:52
world outlook its cain’t the cocaine’s
03:55
the machine itself I mean the British
03:56
state the machine itself here I’m
03:59
quoting from Skidelsky on on Keynes the
04:03
machine itself he believed to be sound
04:05
enough if only the ability and integrity
04:07
of those in charge of it could be
04:08
assured that’s the key and if somebody
04:10
said that this week this weekend that
04:12
who cares about I’m in the guiness the
04:15
state is great who cares about you
04:16
shouldn’t have restrictions and
04:17
government rule the state has great
04:19
provided that we know the people in
04:20
charge about a great guys people our
04:22
integrity and ability in Cyprus approach
04:24
of course means
04:25
organically arrived that British ruling
04:27
elite ie himself because this uh these
04:35
three things I think mark Keynes
04:36
throughout his his life short-run attack
04:39
on principle and individual rights and
04:41
belief in the ruling a league with
04:44
himself among it ok Kane starts all off
04:48
first of all has his whole his whole
04:50
life is more no silver spoon in his
04:52
mouth so to speak he was uh his father
04:54
was a big shot like Cambridge John
04:57
Neville Keynes was a controller a
04:58
changers crane bridge for many years he
05:01
also was also very important for Kansans
05:02
development and career and his father
05:05
was a was a close friend of Alfred
05:08
Marshall and also Marshall had certain
05:10
obligations he felt they had certain
05:12
obligations to Kane namely that the
05:13
Neville because apparently Neville it
05:17
was a Rico’s friend Akane’s a promising
05:19
scholar but never accomplished much
05:22
scholarly output was almost nil he wrote
05:24
a book on methodology which was sort of
05:26
pedestrian book and methodology and that
05:28
didn’t write anything else and so if it
05:30
happens then I could be me if he can’t
05:31
write anything you go with that academic
05:33
administration so he became a controller
05:37
Financial Controller Cambridge and so
05:40
Marshall always felt that Marshall was
05:43
not on his own right I won’t go into
05:45
that but ain’t right Marsha always felt
05:47
he had a certain extra obligation of
05:50
Neville they didn’t have to other people
05:52
because they’d never been accomplished
05:53
and achieve what are you supposed to the
05:55
QI and so this obligation went on was
05:59
placed on young Maynard and so when
06:02
Maynard got out of Cambridge after it
06:04
was a clerk in the office for a while
06:07
Marshall was going to retire make sure
06:09
that before he retired the Canes got a
06:12
post as a lecturer and economics a go
06:14
College King’s College Cambridge and
06:17
part half of the salary was paid by
06:19
Cambridge the other half was paid by his
06:20
father John Neville
06:22
so this is how Keynes started off an
06:24
academia
06:25
by the way Keynes knew I only had one
06:27
term in economics when he started
06:29
lecturing in economics and only taking
06:31
one course in Marshall this is
06:34
apparently was not unusual at the time
06:35
British academia is still kind of
06:37
peculiar
06:39
he knew very little economics to begin
06:41
with and martially what we’ve read
06:43
Marshalls principal he learned on the
06:44
job so to speak on with job training and
06:47
the red marshals principle he had
06:49
Marshalls oral tradition other words as
06:51
evidence before royal commissions and
06:53
his unpublished papers and it’s
06:54
essentially if a key thing about Kane’s
06:59
also just come out in recent years he
07:02
was a member of leaderless of the secret
07:04
society of the Apostle Cambridge
07:06
Apostles very powerful any group at
07:09
Cambridge in the same it wasn’t just a
07:11
college fraternity group I’ve met met
07:14
for the Rustica Keynes’s life would they
07:16
have continual meetings until so Keynes
07:18
died to go back to Cambridge heavy I
07:20
have meetings and sessions etc etc and
07:24
his first characteristic that comes out
07:28
with canes changing attitudes at the and
07:30
the Apostles and everywhere else is the
07:34
first place
07:35
Keynes’s constant emphasis on personal
07:38
power and domination it couldn’t up to
07:42
brutal domination of its fellow people
07:43
or friends and long movers power and
07:46
dominance or the key to his personal
07:48
relationships the second wall he was
07:53
brandriss in philosophy philosophy rule
07:55
his life and the and the philosophy
08:00
which which he adopted fostering GE
08:03
Moore and David Gordon mentioned as
08:04
performing I’m not I’m not interested
08:06
not so much in Moore himself but a
08:08
change his interpretation more in
08:10
Katie’s reaction to it Moore is also a
08:13
Cambridge apostle and all close friends
08:15
of this in this group and the the
08:18
philosophy which seem to the dominate
08:21
Keynes was a bitter attack on bourgeois
08:25
morality Nikita came to this life and
08:29
thought an attack on any kind of
08:32
conventional or middle-class of
08:34
bourgeois morality both in personal
08:36
matters sexual matters and an
08:38
ideological matters so as an attack on
08:41
heterosexuality is inferior attack on
08:44
thrift like a bourgeois family life and
08:48
the whole business and
08:50
Schumpeter sort of alludes to this and
08:52
at the end of sort of subtle fashion my
08:54
constant constantly talking about
08:55
Keynes’s childless vision and so
08:59
campaigns emphases on the short run
09:01
short on hedonism etc as being a key to
09:03
to life so the attack on thrift starts
09:06
from the very beginning and its attack
09:08
and press combination is call for the
09:10
euthanasia of the Ronde a class that
09:12
Merton the mercy killing of the creditor
09:14
class which suddenly press the epitome
09:17
of bourgeois lysis the thrifty creditor
09:19
and fifty same room case interpretation
09:23
GE more uh they keep her friend they
09:27
will know more than I do about this they
09:29
keep referring to more as a pure more
09:31
tremendous personal charisma apparently
09:33
with Keynes everybody else and I keep
09:36
referring to a security of an intellect
09:38
Viking is pure it’s not like a living
09:40
embodiment of pure on who liked that you
09:41
had no small talking in big sort of
09:44
crazy statements to me sound like a
09:46
nutty poseur but what do I know I’m that
09:48
that’s it was not not my type of guy and
09:50
sort of that way any race you seem to
09:53
impress everybody else at King’s College
09:55
Cambridge and when Moore wrote the Prix
09:59
Kippy Ithaca 1903 Keynes said in
10:03
retrospect and said at the time so we
10:04
have two checks here in other words he
10:06
said this is the great revelation
10:07
recruiting from chains the book was
10:10
exciting exhilarating the beginning of a
10:11
new renaissance the opening of a new
10:13
heaven on earth talking about painting
10:15
millennialism that’s interesting phrase
10:17
here ah but that’s what he said in
10:20
retrospect about the thirty years later
10:22
he’s talking bad work it’d be ethnic ax
10:24
at the time he said it was stupendous
10:26
entrancing the greatest book on the
10:28
subject wondrous in original and
10:30
regional a true theory of ethics the
10:34
though it seems to be that the true
10:36
theory of ethics basically whether at
10:39
least the way Keynes interpreted it with
10:41
a rejection of bourgeois morality and
10:44
rejection of any kind of general rules
10:45
Keynes hated most of all unlike the
10:47
general rules and ethical rules running
10:50
so any other sort of rules and therefore
10:52
emphasis on personal personal whim
10:56
personal Caprice personal will the thing
10:59
it fits in with McCain’s entire will the
11:00
power and if
11:03
any general rules were limiting limit of
11:05
the freedom to feeding the power-on part
11:08
of the individual so so the shift to a
11:12
personal ethic personal friendship
11:13
personal love personal beauty
11:16
contemplation of beauty things of that
11:18
sort is against obeying any sort of
11:20
general rules more by the way this is
11:28
sort of interesting we have reflection
11:30
of the boys attack on bourgeois morality
11:35
or any kind of moral principle one of
11:39
his famous statements was form or quote
11:42
we should spread skepticism until at
11:44
last everyone knows we can know
11:46
absolutely nothing quote sounds self
11:48
contradictory to me and again he
11:52
stressed the perfect love and friendship
11:54
of being key the only thing we can bank
11:57
on when we think only goals in life he’s
11:59
the way change looked back on it I’m a
12:02
more circle years later he said we
12:05
entirely repudiated a personal liability
12:07
on us to obey general rules this was a
12:10
very important part of our faith
12:11
everything were their face violently and
12:14
aggressively held and for the outer
12:16
world was our most obvious and dangerous
12:18
characteristic we repudiated entirely to
12:21
customary morals convention the
12:23
traditional wisdom we word it says that
12:25
is to say in the strict sense of the
12:26
term amaura lists and at the age of 55
12:31
in the evil world war two came seven
12:34
more the more I Creed is still quote my
12:36
religion under the surface I remain and
12:38
always will remain at immoralist unquote
12:41
and Keynes also wrote that one of the
12:45
greatest advantages of Moore’s theory as
12:47
of mate morals unnecessary
12:50
I saw interesting comments on the more
12:53
on the more right circle including
12:54
Keynes of the time Beatrice Webb talking
12:56
about more and the more people where she
12:58
knew him very well he said the whole
13:00
doctrine the whole effort all doctrine
13:01
which they pursued was quote nothing but
13:03
a metaphysical justification for doing
13:05
what you like doing what you like but
13:07
other people and what other people
13:08
disapprove of unquote also rate keen
13:12
inside I think there’s a more more
13:14
circle to advert Ron Russell
13:16
we’re also an apostle cambridge apostle
13:18
and who the police people very well and
13:21
what he said is the canes and the other
13:23
group came straight she and the other
13:24
more people quote aim rather the life of
13:27
retirement among fine shades and new art
13:30
and nuance and nice feelings he’s made
13:31
more fine shades and there are nice
13:33
feelings and conceive of a good as
13:35
consisting in the consisting of a it’s
13:40
conceivable goods consisting in the
13:42
passionate mutual admiration of a clique
13:43
of leah elite unquiet a beautiful
13:46
summation of more right doctrine and
13:48
more I practice at the time the
13:51
passionate mutual admiration of a clique
13:53
of the elite of course they will look
13:54
clearly now what interesting thing is
13:59
apparently Keynes also said the one
14:01
chapter in Moore’s pre kept a Ithaca
14:02
which they ignored was as I think
14:04
penultimate chapter called the ethics in
14:06
relation to conduct well more tries to
14:08
set up general rules and this is course
14:10
they disregarded so now another
14:16
fascinating thing the Skidelsky Walker
14:17
bad about Keynes is apparently as David
14:21
mentioned the first from let’s say 90 no
14:25
Forge 1914 believe it is
14:29
Keynes’s whole leisure time devoted his
14:31
treatise on probabilities thinking about
14:33
probability and writing the book the
14:35
book was published in 1921 but was
14:36
written before the war so uh and
14:41
apparently the reason why arrived that
14:42
this was he was trying to destroy
14:43
general rules in other words basically
14:45
trying to destroy the idea of general
14:46
rules of conduct and general causal
14:49
rules and causal rules in general so
14:53
Moore had apparently fallen back on a
14:55
frequentist theory of probability no
14:57
words fall back on a probabilistic
15:00
causal doctrine where you say well at
15:03
least something is probable and
15:04
therefore you go on that basis so keynes
15:07
being against the idea of a realistic
15:10
cause and effect cause in fact in the
15:12
real world came to conclusion no now we
15:15
have to eliminate the frequentist theory
15:17
because at least there that’s too
15:18
realistic we have to claim the
15:20
probability series truly logical in our
15:22
priori we’re gonna a priori logic which
15:25
then has no relation to the real world
15:26
is no rational individual
15:28
instances so even if for example I’ll
15:31
say Lia the probability of a to spot a
15:37
dice is 1/6 on a diet 1/6 I you have to
15:41
say that nothing to do an individual
15:43
dice throwing so this cuts any
15:45
relationship so the probabilities is
15:47
pure logical or your ISM has nothing to
15:49
do the real world this eliminates any
15:51
any threat the real world might be
15:53
governed in some sense by general rules
15:55
so in other words this whole treatise on
15:57
probability is essentially a part of a
15:58
more I’d attack on general principles
16:00
general rules by the way Richard von
16:09
Mises a little vague Ramiz his brother
16:11
was the rate the developers are freaking
16:12
for theory of probability and little
16:14
they took it over in human action you
16:15
know he doesn’t he parently disliked his
16:18
brother and tessellated or not really
16:19
admit it but I think I think I think I
16:23
was pretty clear ok having done this and
16:27
by the way another thing about Keynes’s
16:30
personal one’s an ideological cultural
16:32
life is yes involved in the 19-teens in
16:35
that period also 1920s for the
16:37
Bloomsbury sad I think something David
16:39
mentioned it yesterday somebody else and
16:41
the Bloomsbury settled also Virginia
16:43
Woolf inand Leonard Woolf and Vanessa
16:44
Balinese people was mostly kings college
16:47
and other Cambridge people almost all of
16:49
them but males courts for Cambridge
16:51
people even females ago I think the
16:53
Pemberton College in Cambridge and their
16:56
whole life and the whole writings were
16:58
essentially attacks on visual morality
17:00
it was the whole point of the whole
17:01
business and set off it all fits into
17:03
the to the changes personal lifestyle an
17:07
ideology a 19-13 he gets his first he
17:13
become a bit on the inner she said first
17:15
like he was in the work in the India
17:17
Office before he gets back to Cambridge
17:20
Keynes in nineteen he graduates in 1906
17:24
and he goes into the India Office as a
17:25
clerk and goes back in 1908 gets his
17:30
position partially paid for by his
17:32
father and he becomes an Indian currency
17:35
in finance expert a typical list by the
17:37
way of course is typical of British
17:38
anecdotal nd in general it’s not just
17:40
Keynes
17:41
and all of us work in the in the office
17:43
Ian never expresses slightest interest
17:45
whatsoever on the Indians and their
17:47
British imperialism and the Colonials or
17:49
anything that’s sort of the idea of
17:50
British rule as a natural development
17:51
just yeah this is just assumed it it
17:55
also showed no interest whatsoever in
17:57
ever visiting India than any expert this
17:59
is this Bible also true also James and
18:02
Mel and John Stuart Mill both in the
18:04
experts both rulers of East India
18:07
Company never had any intention
18:08
whatsoever visiting in the other floor
18:09
was important to visit it at any rate
18:13
and Joe Solano said he was a very
18:15
beginning against the gold stand in
18:17
favor of managed credit and expansionary
18:20
credit in 1913 he gets his first big
18:24
government post as a world Commission on
18:26
Indian current finance and currency and
18:29
he’s put in there by evidence friend
18:31
Edwin Montague who was as his a patron
18:34
and mentor way back in college and he
18:37
and he writes his defense of the Gold
18:39
Exchange standard reaction to the month
18:41
great multi new silver scandal at the
18:43
time of the month the Monte EWTN’s
18:45
relatives and friends know bunch of
18:48
other people were bombing a big a big
18:49
scandal and he defended the scandal as
18:52
and try to defend them as a as the
18:54
Honorable honest citizens etc any right
18:57
and this is justice Indian car scene is
18:59
part of that port of that move course he
19:04
calls for the gradual elimination of the
19:05
gold standard as joe said is interesting
19:07
phrase here in his book he’s and look in
19:09
the advance of currency says goal is a
19:12
quoting relic of a time when governments
19:14
were less trustworthy and these matters
19:15
than they are now ah in other words that
19:20
what you need is good people trustworthy
19:22
people to run the plant you don’t have
19:24
to have a gold standard
19:25
trust where the people of course me in
19:26
the Indian English willingly but as
19:28
including himself this of course then we
19:31
get in the general theory that go was a
19:32
barbarous relic
19:38
you also call and book for a central
19:40
bank in India busting central bank and
19:45
again he wanted a discretionary monetary
19:48
policy which were not being limited by
19:50
general rules there was a key thing
19:52
seaman Keynesian doctrine and as a
19:57
result of his he gets to notice are
19:59
basil blackwell it was secretary of the
20:01
Royal Commission an Indian guess when
20:02
World War one comes immediately a key
20:04
post in the Treasury
20:05
it goes on familiar faman fame and
20:07
fortune connects to seem I think and I
20:11
want stress in kinky and doctrine is
20:13
changing life and doctrines is personal
20:15
arrogance incredibly arrogant which goes
20:18
along as well to power and including it
20:20
as arrogance is willingness to have a
20:23
systemic use of lies and deceit in order
20:26
to gain his ends the one of the things
20:31
by the way book which have note that has
20:33
the note at the time and now is this
20:35
quick change of you pointing the passion
20:37
of free trader for a long time they
20:39
still a becomes a passion protectionist
20:40
and shifts back to passion of free trade
20:42
and he was attacked in the English press
20:45
in the early 1930s for being economic
20:46
acrobat india-rubber man and a boneless
20:49
man for this swift changing position but
20:52
all first of all and all these positions
20:54
in favor of government management and
20:55
second well of course even say the build
20:58
of power to him is much more important
20:59
than these rules which share which can
21:01
be shifted will in fact he went so far
21:05
to attack truth and politics even in
21:07
general is a quote from Keynes a
21:11
preference for truth for sincerity as a
21:13
method may be a prejudice based on some
21:16
aesthetic or personal standard
21:17
inconsistent in politics for the general
21:20
method for the practical good so the so
21:23
people people is like a viking in truth
21:25
was just some talk queer aesthetic it
21:27
obviously comes back to bourgeois
21:28
morality which would be she be tossed
21:30
over by statesmen on one occasion and
21:33
public welfare also there’s a hint the
21:37
other Keynes was a favor of exaggeration
21:40
unwise while he was out of power when he
21:42
gets into power he wants to be more
21:43
prudent
21:44
he says at one point words ought to be a
21:46
little wild but after after after he
21:49
gets in the power quote there should be
21:50
no more polite
21:51
licensed the Harry Johnson points out a
21:59
book on Kenya McCain who always always
22:01
convinced on any issue whatsoever
22:03
whatever it happens to be that no one
22:05
was doing anything about it
22:06
we also has serious the problem was no
22:09
one else was doing anything about it
22:11
and say were they were wrong only Keynes
22:13
was right I mean I think you see were
22:14
question
22:15
so Keynes was right and every question
22:17
not because he had general consistent
22:18
principles that we’ve seen he hasn’t but
22:21
because he was right he was he superior
22:24
a lead person with the world of power
22:30
the he believed apparently I just call
22:34
Keynes an egomaniac believe he could he
22:37
could conquer any problem quickly and
22:39
come to the right conclusions on it
22:42
he is typical of change for example he
22:47
told Hayek as a famous thing among
22:49
Hayekian anybody told Hayek at the end
22:51
of his life if his disciples went too
22:53
far with inflation of public debt he
22:55
could always change things around he to
22:56
snap his fingers and everything would
22:57
shift
22:59
unfortunately Keynes died and left us
23:02
with his long run
23:06
the we’re now living in the Keynesian
23:10
warm run he’s happily dead the tip about
23:15
to be the most typical thing about and
23:17
Keynes intellectual arrogance it respond
23:20
lecturer responsibility was the way he
23:22
when he reviewed Mises money and credit
23:26
Mike came out in German he was an editor
23:28
League anomic Journal for many years and
23:30
as an editor he reviewed in a short book
23:32
note and but he said about the book was
23:35
something like that very short he said
23:36
well this is great it’s a useful book
23:38
the authors were highest highest
23:40
enlighten you something like that which
23:42
I don’t quite the way that means any was
23:44
highest enlighten use but the book is a
23:46
disappointing because there’s nothing
23:47
original in it that’s why you summed it
23:49
up now whatever you think of Jesus
23:51
tearing money incredibly zhing Lee
23:52
original one thing you can say about it
23:55
was just the old trite stuff so any
23:58
Rice’s treatise on money twenty years
24:00
later and a footnote that well you know
24:03
he doesn’t really know Germany knows
24:05
German fairly well then he only knows
24:07
German enough to understand ideas that
24:09
he already knows you can’t understand
24:11
you can’t understand any new ideas I
24:13
want I want you to kind of lie for a
24:15
moment the hot spot young middle
24:17
I’m a unmitigated gall somebody with
24:20
mid-city doesn’t know German well enough
24:21
to understand any new ideas and then
24:23
tank Mises for not having any new ideas
24:27
that’s the only canes who do that uh
24:33
okay also I think is certainly a
24:38
strategy and the general fury was out of
24:40
a chronic liar I think no other way you
24:42
can put it for example he says in
24:44
general fear and he talks about history
24:45
of thought she does quite a bit in there
24:47
nobody before him even worried about
24:49
unemployment much less thought about it
24:51
he was the only one he john maynard
24:53
keynes the only one ever to think about
24:55
unemployment and worry about it think
24:56
about the solution he lived in a time of
24:59
course and everybody before him he
25:00
called classical economist sneer he
25:03
lived at a time when when when Hayek and
25:05
the Hayek’s doctrines were have become
25:07
important for slicey because of the
25:08
tackle the unemployment problem whether
25:10
you read with it or not he knew it all
25:12
she knew about Austrian theory least
25:14
tackling important probably knew about
25:15
the pingu and so forth Toyama talking
25:17
about unemployment yet he had the goal
25:19
of claim he was the first one ever think
25:20
about it unfortunately most economists
25:23
since Keynes and not steeped in history
25:25
of economic thought not one of the rate
25:26
strengths of the profession it died out
25:28
on most because as the economist began
25:31
to think of economics as like physics
25:33
after your physicist you don’t really
25:34
bother dealing with eighteenth century
25:36
physics and so he got away with it he
25:39
managed to persuade most of the
25:40
profession and nobody book before before
25:42
Keynes
25:42
worried about unemployment or having any
25:44
solution offer any theory to offer about
25:46
it that I think is the most flagrant
25:49
case of obvious line going around that
25:53
and he also he also lied about C’s law
26:01
easier and again everybody takes us as
26:04
gospel and everybody defines say hello
26:06
our sites as being quote supply creates
26:08
its own demand that does not save law
26:10
first of all save for it’s never even
26:12
said anything like it but point is and
26:13
says law cut points out is a supply of X
26:17
constitutes at a man for Y Z etcetera
26:20
something it’s not that the supply of
26:21
peaches creates a demand for peaches the
26:24
supply peaches creates a demand for
26:26
other products that peach seller will
26:28
end by other things
26:29
so by misstating says law making seem
26:31
like a loony law event half price it can
26:34
easily refute it this is called a
26:35
strongman tactic and unfortunately most
26:39
of most
26:40
story of economic thought of taking this
26:41
as gospel Jesus a law says the only
26:44
thing they’ve done since Keynes we put
26:46
it in the mass of the rush put save one
26:48
of the map see they’re not using a
26:50
mathematics a was a very sound of math
26:51
knocking hi Mike’s question uh you also
26:55
said that mothers might be a common fact
26:57
might not have lied about this he might
26:59
he might have been honestly an error
27:00
about Malthus Malthus was a pre
27:03
Keynesian it’s true we worried about
27:04
under consumption but you know he was
27:06
only in pre Keynesian for about three
27:08
years after learned polio like Wars in a
27:10
recession after that after that he
27:12
bounced back and roughly under
27:13
consumption stuff so anybody can give
27:15
him a possible wire that him can’t prove
27:19
it
27:38
shuffle papers here okay now we get to
27:43
Keynes’s personal style position was
27:47
systemic lying in the sita severs
27:49
personal style is kind of very
27:50
interesting uh basically as the
27:53
Johnson’s point out he flattered his
27:56
students outrageously but if you’re a
27:58
student
27:58
it’s a any dumb thing instead he said
28:00
yes there’s a great point they’re very
28:02
charming and flattering of students
28:03
thereby gathering their loyalty and
28:06
vicious hello my name is colleagues and
28:09
public he denounces show fraud show up
28:12
as colleagues being stupid in front of
28:14
their common students probably the most
28:17
vicious single thing he’s done I’m not
28:18
an expert I’m how vicious he was but at
28:21
least to me one of my single vicious
28:23
things are changed it was great he
28:24
treated his old buddy Dennis Robertson
28:27
the H Robertson Hill is a its former
28:30
student and colleague at Cambridge was
28:32
much better economist than Keynes one of
28:34
the things about Robertson was he was
28:35
extremely and painfully shy even in a
28:37
period of very shy academics of accept
28:41
erection or lie he was he stood out
28:42
almost pathologically shy
28:45
for example cain’t of Robertson would
28:48
write out all of his lecture that is
28:49
often done on those might every word out
28:51
he refused to take any questions
28:53
whatsoever wouldn’t talk to anybody but
28:55
the key thing for Robertson and then so
28:58
and then in those days the Cambridge may
29:00
enter injure Cambridge mail system was
29:02
extremely efficient it’d be like three
29:03
mail services a day so a lot of people
29:06
wrote notes to each other but his
29:08
secretary was right next to and you
29:10
never speak to a secretary just write
29:11
write a message to her leave it on her
29:13
desk so this poor guy and the very sweet
29:16
guys obviously full of gentle quotes
29:18
from Alice in Wonderland things like
29:19
that and and so rocks of Keynes of
29:23
course knowing this
29:24
exploiting Robertson’s weakness when
29:25
getting said his students intellectual
29:28
Studies on Robertson a her Assam
29:30
denounced some heckle on and so forth on
29:32
I just horrible
29:32
it’s a systematic torture for Robertson
29:35
and
29:36
Joan Robinson is one of the people wrong
29:38
in this escapade
29:42
so I think good I think that sort of
29:46
sums up in many ways Keynes’s character
29:47
boot a latina say doesn’t have his
29:49
character um okay one of the things I
29:54
want to point out about the general
29:56
theory I don’t think it’s been pointed
29:58
out enough he really has a certain
30:01
sociology and economic sociology and
30:03
general theory it’s been sort of alluded
30:04
to here this weekend he sets up three
30:08
social classes basically the key to his
30:09
general theory the three social classes
30:11
and classes and societies one is the
30:13
consumers consumers are a nice guy
30:15
they’ve the consumer spending is
30:17
important but they’re dumb robots
30:18
passive determined robots and they’re
30:22
they’re they’re American okay it might
30:28
be level blown away by their stupid and
30:29
passive and robots then you have the
30:32
investors the second categories second
30:35
social category investors are not robots
30:37
they have free will
30:38
they’re dynamic they’re free well
30:40
they’re interesting peoples are worth
30:42
but they’re irrational crazy loonies
30:46
that creatures a mood they’re optimist
30:48
and pessimist that’s been alluded to
30:50
here before and they wake up in the
30:52
morning is feel good to go out and
30:54
invest if they wake up tomorrow morning
30:55
feel lousy they stop investing so you
30:58
can’t rely on their erratic and their
30:59
their screwballs and so we’re and so on
31:01
and that’s why and this these these two
31:04
classes constitute the national output
31:06
national income and output fortunately
31:08
however there’s a deus ex machina gotta
31:10
got out of the machine is a third class
31:12
government government does not determine
31:17
their free will and they’re active and
31:19
all I think and not remember anything
31:21
and government as contrasted being
31:24
erratic and moody as the investors are
31:26
irrational is supremely rational so
31:29
especially of course if they’re guided
31:30
by top economists like Keynes
31:34
it’s a philosopher a king or phosphor
31:35
guiding the king and so the philosopher
31:38
can’t your phosphor kings and step in
31:40
and correct for the moods of the
31:42
investors investors wake up one morning
31:44
and too pessimistic they don’t invest
31:45
enough like government steps in spends
31:47
if if the investors are too little too
31:51
manic and they spend to the invest too
31:52
much the government steps in and taxes
31:54
them for us and so the government is the
31:57
wise governor or balancing machine in
32:00
the system since they’re wise and
32:03
supremely rational by the way that’s the
32:04
reason why government spending in the
32:06
Keynesian national income statistics is
32:08
always considers in similar to
32:09
investment it’s honorary investment
32:11
whatever the government does is
32:12
investing because they’re they’ve had
32:14
they have free well and so contrasted
32:16
consumers were robotic Li determined so
32:19
once one points that’s at I don’t think
32:22
we have to go gauge too much to see the
32:24
fallacy in this this assumption hey the
32:32
we now get to the Keynes’s of political
32:36
philosophy which I’m going to too much
32:38
so far and it hasn’t been stressed
32:44
enough I think in a literate literature
32:46
for one thing there’s the famous one key
32:49
to Keynes his political philosophy as
32:51
Kansans forward to his German addition
32:54
this is not even mentioned by Herod I
32:57
don’t know if Skidelsky too much I think
32:58
sigasi is very good story and so forth
33:00
but Harris allegedly definitive life of
33:02
Keynes there’s not a single mention of
33:03
the fact but shortly after the book
33:06
general theory came out 1936 Keynes
33:08
wrote a foreword for the German edition
33:10
which came out late 36 and came out very
33:13
quickly after the English edition he
33:16
writes this for which was only been
33:18
translated by obscure
33:19
subversives in the United States like
33:21
Henry Hazlitt and Jim Morton and I mean
33:25
it’s in German those were I want to
33:27
check with the translation anyway he
33:29
says in there he’s talking about the
33:32
Bert but the German regime as of 1936 in
33:35
the words of the Nazi regime he says
33:37
quote the theory of aggregate production
33:39
which is the point of a following book
33:40
general theory nevertheless can be much
33:43
easier adapted to the conditions of a
33:45
totalitarian state than the theory of
33:47
production
33:47
version of a given production puts forth
33:49
under conditions of free competition and
33:51
a large degree of lays a fair this is
33:53
one of the reasons I call my theory a
33:55
general theory the theory is general one
33:58
reason because it’s better suited to a
33:59
totalitarian state of and put into
34:01
effect and to her rotten free
34:03
competitive society so so he looked at
34:08
the Nazi regime he thought this is great
34:09
it’s a beautifully beautifully suited to
34:12
put put Keynesian doctrine into effect
34:14
which indeed it was in addition to that
34:18
and nineteen is a nineteen thirty case
34:21
extremely interested in sir Oswald
34:22
Mosley z– fascist national economic
34:26
plan she proposed nineteen thirties sir
34:29
Oswald Mosley set up the new and the
34:31
so-called new party and fascist party in
34:33
the early 30s Skidelsky by the way he
34:37
was not run just correct mark on this
34:39
he’s not a lifelong student of came
34:40
before you wrote the biography of Keynes
34:41
it would have biography Mosley’s who’s
34:43
particularly suited to understand the
34:45
Mosley Keynes connection now you’re
34:47
right
34:49
so so so much with the in favor of
34:51
fascism in the early thirties in
34:53
Virginia Woolf wrote to an old friend of
34:54
hers in a letter and said gee she’s
34:57
afraid attained my sock converting her
34:59
to converting her to a form of fascism
35:01
she was if she felt in danger of her
35:03
soul of that point as for communism
35:07
Keynes was more ambivalent he the one
35:11
hand II admire the young intellectual
35:12
communist of the late 1930s because they
35:15
reminded him of I get this this is gonna
35:17
this is a real corker they reminded him
35:20
of a typical non conformist English
35:21
gentleman who made the Reformation for
35:23
the great rebellion
35:24
seventeenth century one us our civil and
35:27
religious liberties and humanized the
35:29
working classes last century unquote as
35:32
interviewing a new statesman in 1939
35:34
kind of odd way of looking at the
35:36
Communist Party on the other hand he
35:39
criticized the communist for the other
35:42
side of the Reformation great rebellion
35:43
coin because they were Puritans that
35:45
they believed worse in bourgeois
35:46
morality not that twenty people more
35:48
pure than Orthodox Stalinist type so
35:52
Keynes’s anti Puritanism night comes out
35:53
he says he says our Cambridge on you
35:57
he’s attacking a Cambridge
35:57
undergraduates will go to Russia in late
36:00
30s and liked it
36:01
he says our Cambridge undergraduates
36:02
disillusion when they go to Russia when
36:04
they find a quote read fully
36:05
uncomfortable of course not that’s what
36:06
they’re looking for I wasn’t attacking
36:08
Tommy doesn’t because it’s too
36:09
puritanical makes people it’s it
36:11
emphasizes austerity and lack of
36:15
hedonism personally his moral philosophy
36:18
is is basically hedonistic and their
36:20
anti and hidden destiny they want people
36:21
just to shape up and and will that and
36:24
he doesn’t that’s what he doesn’t like
36:27
another thing he doesn’t like about
36:28
communist in addition to being
36:29
puritanical is this proletarian somebody
36:32
mention of the commissioners yesterday
36:34
uh how quote how can I adopt such a
36:37
creed which preferring the month of the
36:38
fish exhausted boorish proletariat above
36:41
the bourgeoisie in the Intelligencia who
36:44
are the quality and life and surely
36:45
carry the seeds of all human advancement
36:46
there I think we have a key and was he
36:49
who was here uh be pilot area he’s
36:51
interested in the bourgeois alien
36:52
lecture what means of power elite that
36:54
means him I mean he said somewhere I
36:56
think somebody mentioned it yesterday
36:57
here we get down the class struggle
36:59
between avoids wrong Paula Tara he’s a
37:01
bourgeois why should you join uh Paula
37:02
Terry auntie useful here’s an
37:04
interesting point why indeed so for all
37:09
these reasons he’s much more attractive
37:11
the fascism he was to with the communism
37:16
to get to or to get the Keynes the
37:20
person some up came to the person the
37:26
there’s one added to talk about 100 I’m
37:29
on my own I guess one of Lionel Robbins
37:31
is at it the Lionel Robbins converted
37:33
the Keynesianism
37:33
well a new book by O’Brien rama’s Kenji
37:36
didn’t really convert or he’s shifted
37:37
back name he certainly did convert in
37:39
many ways and his or biography he writes
37:43
about he writes about Keynes personally
37:45
McKenna’s not this is not irony I want
37:47
to point out it’s not being satiric here
37:49
it’s a straight stuff this Robbins
37:51
talking about Keynes and he appeared a
37:52
pre Bretton Woods conference at raft
37:54
conference Atlantic City in June 1944
37:57
he’s writing about Keynes quote Keynes
37:59
was in his most lucid and persuasive
38:01
mood and the effect was irresistible
38:02
Keynes must be one of the most
38:04
remarkable men in the world to me
38:06
one most remarkable men I’ve ever lived
38:08
the quick logic the wide vision globally
38:11
incomparable sense of the fitness of
38:12
words Oh
38:14
to buy to make something several degrees
38:15
beyond the limit of ordinary human
38:16
achievement uh only Churchill II right
38:23
guys as a comparable stature and then he
38:25
says but Keynes usually the classical
38:27
style of our life and language is true
38:29
but shuffle with something which is not
38:30
traditional a unique unearthly quality
38:32
which one could only say that it’s pure
38:34
genius the American satin trance is a
38:37
god-like visitor sang and the golden
38:39
light play all around but God like
38:43
visitors Sanger golden white pale around
38:44
us
38:45
Robinson do you have change or before I
38:48
get to my own view I just I miss
38:49
something here the rock backtrack a
38:50
second uh he’s also he’s also pull the
38:55
excesses of communism and he says he
38:58
wrote not communist rule in part perhaps
39:02
it Soviet rule is a fruit of some
39:05
beastliness on the Russian nature or the
39:08
Russian and Jewish nature’s whereas now
39:10
they are allied together also he said he
39:13
had doubts and about cooking back
39:15
communism II adaptive quote Russian
39:17
communism unquote quote make Jews less
39:18
avaricious unquote ok so that’s uh
39:22
that’s the godlike figure to Robin he’s
39:25
a god-like figure with a golden light
39:26
playing all around the halo I’ve got a
39:28
slightly different assessment some up
39:36
Kane’s arrogant sadistic power powers
39:40
besotted bully deliberate is systemic
39:44
liar
39:46
intellectually irresponsible an opponent
39:48
of principle in favor of short-term
39:51
hedonism a nihilistic opponent of
39:52
bourgeois morality in one of its areas
39:54
hater of thrift and saving somebody want
39:58
to liquidate the creditor class
39:59
exterminate the creditor class and
40:02
imperialist anti-semite and a fascist
40:07
outside of that I guess he’s a great guy
40:17
you

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