One of the monumental
figures of economic history, John Maynard
Keynes. Adherence to his
ideas during some periods seems nearly
unquestioned. In others, they're a
rallying cry for fierce opposition.
Like the Brits and Americans, Europeans Must Re-Embrace Keynes (Die
Welt, Germany)
Neoliberals
despise him as the Evil One: British economist John Maynard Keynes taught us
that the state should spend money in times of crisis. Bush and Obama have done
just that. With success. If someone finds himself in a hole and continues to
dig, it's called cognitive dissonance. It may be that in the long run, the method
of Angela Merkel is the best. But in the long run, as Keynes said, 'we'll all
be dead.'
Who
is this man? He was a successful stock market speculator and an art collector
with finely honed instincts, as well as a philosopher, an economist, and for
many years, a member of the Liberal Party. He despised Marxism,
because Marx's doctrine wasn't just scientifically wrong, but “exalts the
boorish proletariat above the bourgeoisie and the intelligentsia, who with all
their faults, are the quality of life
and surely carry the seeds of all human achievement.” Morally and
philosophically, he was in agreement with economist Friedrich Hayek, who is
widely regarded as the founder of neoliberalism. That's
right: We're referring to John Maynard Keynes.
Keynes
was a complex thinker whose ideas cannot be easily reproduced in an abridged
form without being trivialized. In essence, he was concerned about saving
capitalism from itself and from the threats of communism and fascism. The
greatest danger, Hayek
wrote in 1931, “is the likely practical failure of the
application of your philosophy in the United States,” which could lead to
“disillusionment” with its philosophical presuppositions: the superior value
of the individual as opposed to the collective.
Raise the
spirits of investors
After
the “stagflation” of the
seventies, Keynesianism, the doctrine which states that government should adopt
counter-cyclical spending policies - spending during periods of economic crisis
and saving in boom times - fell into disfavor with economists. It was
associated - wrongly - with government regulation of every aspect of life, and,
for instance, the irresponsible fiscal policies of governments under Willy Brandt and Helmut Schmidt. For 30
years - from 1977 to 2007 - Keynesianism was something to be overcome.
Then
came the crash. In the Anglo-Saxon world, one remembered the man who had saved
capitalism before. George W. Bush and Barack Obama in the United States spent
and continue to spend money lavishly to raise the "animal spirits" of
investors and consumers, who, according to Keynes, ultimately determine the success
of the economic cycle. In Europe as well, we initially thought of Keynes - as
shown, for example, by the premium paid by the “grand coalition” for the
scrapping of old cars. However, when interest rates on European sovereign debt rose
briefly to record levels, Keynesian ideas and policies were quickly returned to
the poison cupboard. Since then, all of Europe continues to economize itself
into the crisis - at the expense of the younger generation, that is unemployed today,
and which will be expected to pay the pensions of the baby boomers of tomorrow.
Posted By Worldmeets.US
Europeans are most
distrustful of Keynes
The
demonization of Keynesian economics so thoroughly succeeded that continental
Europeans - in contrast to the British and Americans and during in the worst
crisis of the postwar period - won't even consider trusting Keynes' ideas. According
to the most
recent survey by the Pew Institute, 81 percent of French, 67 percent of
Germans and Spaniards, and 59 percent of Italians agree with cuts as a way of
overcoming the crisis: Only 18 percent of French, 26 percent of Germans, 28
percent of Spaniards, and 29 percent of Italians favor increased spending as a
way of stimulating the economy. Well countries, let the fun continue.
The 'practical
failure' of neoliberal ideas
Keynes
feared the consequences of the “practical failure” of neoliberal ideas that are
visible across Europe. Left-wing advocates support a rule of “we” - and
right-wing ideologues among nationalists are on the rise. The main victim of this
nationalistic fervor is the European Union: Meanwhile, according to the Pew
survey, the French are even more euro-skeptical than the British, and elsewhere,
British levels of skepticism on the E.U. are
prevalent. The United States and China watch with concern, as Europe puts the
values of Hayek at risk in his own name.
If
someone finds himself in a hole and continues to dig, it's called cognitive
dissonance. It may be that in the long run, the method of the Swabian housewife [Angela Merkel]
is the best.
But
in the long run, as Keynes said, "we'll all be dead."
[Editor's
Note: German Chancellor Angela Merkel, as a woman from southwest Germany, speaks
with a Swabian dialect of German.]
