Wednesday, March 31, 2010

Peter Foster in the National Post follows up with "Multiplication fables"

Definitely have to start reading more National Post. We have a national news publication which quotes Henry Hazlitt and attacks Keynes? I never knew.

One must read this follow up to Niels Veldhuis and Charles Lammam's Full Comment.

Here's an excerpt:
One name that didn’t crop up in the critique was that of the father of stimulus, John Maynard Keynes, who manufactured the theory that is still embraced by the activist wing of the economics profession: that is, those who promote programs that fly in the face of economics.

What is truly astonishing about the resurrection of Keynesianism from the policy crypt is that this grab-bag of dodgy concepts — from “the multiplier” (spend yourself rich!) to the “paradox of thrift” (saving is bad for the economy!) — were long ago demolished both in theory and practice. Friedrich Hayek, Milton Friedman and James Buchanan, among others, had put the intellectual boots to Keynesianism before 1970s stagflation confirmed its long-term unworkability. In Canada, it took until the mid 1990s for Liberal Finance Minister Paul Martin to slay the debt beast unleashed by the Trudeau administration’s embrace of Lord Keynes.

One of the most devastating critiques of Keynes — which requires no grasp of abstruse econometrics — came from the great economic journalist, Henry Hazlitt. In his 1959 book, The Failure of the “New Economics,” Hazlitt poured scorn on Keynes’ anti-business sentiment and fantasy that government investment was equivalent to that by the private sector.
And then Hazlitt's quote:
“So there you have it,” wrote Hazlitt. “The people who have earned money are too shortsighted, hysterical, rapacious and idiotic to be trusted to invest it themselves. The money must be seized from them by politicians, who will invest it with almost perfect foresight and complete disinterestedness (as illustrated, for example, by the economic planners of Soviet Russia). For people who are risking their own money will of course risk it foolishly and recklessly, whereas politicians and bureaucrats who are risking other people’s money will do so only with the greatest care and after long and profound study. Naturally the businessmen who have earned money have shown that they have no foresight; but the politicians who haven’t earned the money will exhibit almost perfect foresight. The businessmen who are seeking to make cheaper and better than their competitors the goods that consumers wish, and whose success depends upon the degree to which they satisfy consumers, will of course have no concern for ‘the general social advantage’; but the politicians who keep themselves in power by conciliating pressure groups will of course have only concern for ‘the general social advantage.’”

6 comments:

Chris said...

The writers of those paragraphs are going to be super surprised when Marx is reconstituted by a impoverished working class. Lol, morons.

Furlong said...

Yea...can't wait for the day when Marxism bring peace and prosperity to the world....right....this is the same philosopher that provided an intellectual backing for what used to be Communist Russia and the smaller communist countries of eastern europe right?

You do realize that marxism will never work because too much power has to be placed in the hands of the few?

Furlong said...

And I know you're going to tell me that those eastern european countries were not marxist.

So, if Marx is to be "reconstituted" where was it originally "constituted"?

Chris said...

"Yea...can't wait for the day when Marxism bring peace and prosperity to the world....right....this is the same philosopher that provided an intellectual backing for what used to be Communist Russia and the smaller communist countries of eastern europe right?"

Not really.

"You do realize that marxism will never work because too much power has to be placed in the hands of the few?"

Has to be? Really, based on what argument? I would say that the Stalinist and Mao regimes were the result coming from centralized regimes. The gulags were already built before Lenin ever dreamed of storming the gates.

"And I know you're going to tell me that those eastern european countries were not marxist."

Yes, that is right. Marx argued that history would lead to only two classes existing: the working class and the capitalist class (and a small middle class in the middle). In Russia, in all the communist states to date, the working class was in embryo when the vanguards took power, it was very small, and all of those countries were still dominated by peasant and landed class politics. That is why it is a hammer and sickle, Josh. But the hammer coming first was just a dream. The super ultra majority of people in Czarist where either peasants or landed class lords. It was ripe for a bourgeoisie revolution, not a Marxist one.

"So, if Marx is to be "reconstituted" where was it originally "constituted"?"

Marx isn't to be reconstituted.

Furlong said...

"Marx isn't to be reconstituted."

Then why'd you say it?

Chris said...

Reconstituted as a political aim, not changed as an argument.