Keynes vs Friedman: who was the most influential economist?

[Tumisu]

Keynes' theories were extremely influential from the Great Depression to the oil shocks in the 1970s, but since the 1980s Friedman's theories have strongly influenced policy. With the global financial crisis some keynesian ideas are coming back. Between the two economists: who was the most influential?
Keynes vs Friedman: who was the most influential economist?

 

[EdwardBaiamonte]

Keynes' theories were extremely influential from the Great Depression to the oil shocks in the 1970s, but since the 1980s Friedman's theories have strongly influenced policy. With the global financial crisis some keynesian ideas are coming back. Between the two economists: who was the most influential?
Keynes vs Friedman: who was the most influential economist?

the far better question is, whose ideas were better. Friedman's idea was that capitalism works while Keynes felt capitalism needed a Nazi/soviet apostle like him to make it work.

 

[Friends]

During the 1970's Keynesian economic policies were discredited because inflation and unemployment were chronically high after 1973.

Republicans had never liked Keynesian economic policies because Keynes argued that the government should have more money and power, and that the business community should have less.

Republicans used the stagflation that began with the inflationary recession of 1974 to discredit Keynes. However, the stagflation of the 1970's had been caused by the rise in the price of petroleum that followed the OPEC Oil embargo of 1973, and the Iranian Revolution of 1979.

The Great Depression was not caused by a shortage of an essential natural resource, but by demand stabilizing at a permanently low level. Also, the problem during the Great Depression was not inflation, but deflation.

In other words, Keynesian economic policies were not designed to deal with the different economic problems of the mid and late 1970's.

 

[Friends]

Keynes' theories were extremely influential from the Great Depression to the oil shocks in the 1970s, but since the 1980s Friedman's theories have strongly influenced policy. With the global financial crisis some keynesian ideas are coming back. Between the two economists: who was the most influential?
Keynes vs Friedman: who was the most influential economist?

the far better question is, whose ideas were better. Friedman's idea was that capitalism works while Keynes felt capitalism needed a Nazi/soviet apostle like him to make it work.

John Maynard Keynes was neither a Nazi, nor a Communist. Nevertheless, it is true that the Soviet Union was not affected by the Great Depression, and that Nazi Germany recovered more rapidly than the United States. This is because a powerful government was needed to pull a country out of the Great Depression.

 

[EdwardBaiamonte]

In other words, Keynesian economic policies were not designed to deal with the different economic problems of the mid and late 1970's.

totally stupid and 100% liberal!! If you read the General Theory, not that you could understand it, you would learn that it dealt with all economic problems. What we have learned since then is that liberal/soviet interference with the economy gives you a soviet result.

 

[EdwardBaiamonte]

This is because a powerful government was needed to pull a country out of the Great Depression.

Totally stupid of course. Powerful govt caused the Great Depression like it caused the Soviet Union. Liberalism prolonged the depression for 10 years and caused world war. It had nothing to do with ending the depression which did not end until FDR was finally dead!! Powerful govt was the Great Depression, the worst period in American History!

See why we are 100% positive that liberalism is based in pure ignorance.

 

[EdwardBaiamonte]

powerful government was needed to pull a country out of the Great Depression.

incredibly stupid and liberal. How could powerful lib/commie govt pull a country out of depression rather than keep in depression??

 

[EdwardBaiamonte]

John Maynard Keynes was neither a Nazi, nor a Communist.

OMG!! How totally illiterate can a human being be??


As Communist Party General Secretary William Z. Foster commented, "The Nazi fascists were especially enthusiastic supporters of Keynes."[65] Former Trotskyite[66] Dobbs recounted that Harvard economist Joseph Schumpeter observed that in Nazi Germany, "A work like Keynes’ General Theory could have appeared unmolested—and did." In the introduction to the 1936 German edition of his treatise, Keynes himself suggested that the total state that the National Socialists were then building was perfectly suited for the implementation of his investment schemes:


“ The theory of aggregate production that is the goal of the following book can be much more easily applied to the conditions of a totalitarian state than the theory of production and distribution of a given output turned out under the conditions of free competition and a considerable degree of laissez-faire.[67]

 

[georgephillip]

the far better question is, whose ideas were better. Friedman's idea was that capitalism works while Keynes felt capitalism needed a Nazi/soviet apostle like him to make it work

Which Economist best understood how unemployment rebounds after one of capitalism's many manufactured crises?

 

[EdwardBaiamonte]

Which Economist best understood how unemployment rebounds after one of capitalism's many manufactured crises?

1) capitalism is self correcting so there would be no crisises
2) FDR tried Keynes and unemployment did not rebound until FDR and Keynes were dead 15 years later and after their world war had killed 60 million. Under Friedman economy would have been good in 1930.

 

[Treeshepherd]

My two cents: John Maynard Keynes is rolling over in his grave right now. He was never in favor of chronic debt. What he said was that if you have a surplus, invest it in public infrastructure. And if you incur a debt, it had better be short term, like during the WWII era.

Today's policy has nothing to do with Keynesianism. It is better described as Voodoo Economics, to borrow a phrase from Shrub Sr.

 

[EdwardBaiamonte]

My two cents: John Maynard Keynes is rolling over in his grave right now. He was never in favor of chronic debt. What he said was that if you have a surplus, invest it in public infrastructure. And if you incur a debt, it had better be short term, like during the WWII era.

Today's policy has nothing to do with Keynesianism. It is better described as Voodoo Economics, to borrow a phrase from Shrub Sr.

your 2 cents is not worth 1 cent because Keynes never said that and you have have never read Keynes!!


Do you understand?

 

[Treeshepherd]

The Independent Report John Maynard Keynes Was Right and not for the reason you think

 

[EdwardBaiamonte]

The Independent Report John Maynard Keynes Was Right and not for the reason you think

dear we can all post links in the 1000's

 

[georgephillip]

) capitalism is self correcting so there would be no crisises
2) FDR tried Keynes and unemployment did not rebound until FDR and Keynes were dead 15 years later and after their world war had killed 60 million. Under Friedman economy would have been good in 1930.

What was the biggest threat to the US Economy in 1930, unemployment or inflation?

 

[Treeshepherd]

Biggest threats in 1930 were unemployment and deflation.

 

[georgephillip]

Biggest threats in 1930 were unemployment and deflation.

The classical economists in the early '30s believed the price adjustment mechanism would restore prosperity; however, Keynes believed a much larger mechanism, income adjustment, would prevent full employment absent massive government spending.
Coursera

 

[Treeshepherd]

In his text National Self-Sufficiency, Keynes describes his pivot away from free trade toward a Pat Buchanan-esque protectionism. He says that the goal of achieving international uniformity in trade (everyone playing by the same rules) is not realistic.
At the same time, he cautions against a return to classic mercantilism.

Throughout his career, Keynes showed a willingness to change his mind. So, it's difficult to guess what he would say about the US in 2014.

He definitely would bristle at the description of a guy like Paul Krugman as a Keynesian. Like I said before (see above link) today's model is not Keynesian. It's Voodoo Economics, going back to Reagan and continuing through Obama.

Secondly, I think Keynes would be a critic of globalism. He would say that the American worker has been ill-served by NAFTA and GATT. He might share my view that what needs to happen is a certain amount of decoupling. And his project for 2014 might be to devise a sort of neo-mercantilist model.

 

[georgephillip]

Secondly, I think Keynes would be a critic of globalism. He would say that the American worker has been ill-served by NAFTA and GATT. He might share my view that what needs to happen is a certain amount of decoupling. And his project for 2014 might be to devise a sort of neo-mercantilist model.

Keynes would likely find it hard to imagine the US as a debtor nation:
"In 1936, when Keynes wrote his classic—The General Theory of Employment, Interest and Money—he was emphatic on this point: no country, ever, should run up any kind of trade deficit, much less the trade deficit on steroids we are running.

"Of course, in 1936 and for years after, the United States was the biggest creditor country in the history of the world.

"So Keynes never worried about our being a debtor country—rather, he spent much of his last days begging the United States to get other countries out of debt.

"If he came back and saw the colossal external debt we run now, he would be pushing for a serious plan to bring it down just as hard as he’d be pushing a stimulus for full employment."
What Would Keynes Do The Nation

 

[Treeshepherd]

Yeah. In the post-war years, after Europe's industrial infrastructure was demolished and before the emergence of the "emerging economies", America had a huge trade surplus.

I agree that Keynes would push for policies to curb our trade deficit. That, in and of itself, would serve to drive down unemployment. But, as you say, he'd also promote fiscal policy and government spending as stimuli.

I try to remember (and it was something that Keynes was ever-mindful of) that whatever needs to be done must be politically realistic. People vote out of self-interest. They aren't going to fall on their swords for the benefit of future generations. The public won't tolerate a government which promotes short-term pain to the ends of long-term gain. And that's why democracy inevitably ends in suicide.

Globalism promotes world peace. If you're a billionaire and your assets are spread around the globe, you don't want those countries at each others' throats. Of course, if you're Col. Gaddafi in Libya and you aren't going along with the program, you get squished. In that way, globalism trends the world toward uniformity.

On the down-side, American wages suffer from globalism. Employment suffers. And economic sickness in one part of the world can spread to others.

I just try to practice my own version of economic patriotism by buying local food and local products. In other words, I'm not buying any Christmas presents at Amazon.com.