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that is not sustainable without still further efforts at distorting the structure of relative prices through inflationary finance. The Keynesian inflationary biases can be considerably more destructive than a simple increase in the general price level, because the changes in relative prices lead to further distortions as people act on the basis of price signals that are inconsistent with the underlying structure of preferences and technology. As a result of these mistakes, decisions will be made on investment and the employment of resources that are not sustainable by the economy. Unemployment and capital waste will then result as people readjust their plans and actions to correct mistakes based on erroneous signals in the economy. E. CONCLUSION Why does Camelot 1 lie in ruins? Intellectual error of monumental proportion has been made, and not exclusively by the politicians. Error also lies squarely with the economists. The 'academic scribbler' who must bear substantial responsibility is Lord Keynes, whose thinking was uncritically accepted by establishment economists in both America and Britain. The mounting historical evidence of the ill-effects of Keynes's ideas cannot continue to be ignored. Keynesian economics has turned the politicians loose; it has destroyed the effective constraint on politicians' ordinary appetites to spend and spend without the apparent necessity to tax. Sober assessment suggests that, politically, Keynesianism represents a substantial disease that over the long run can prove fatal for the survival of democracy. 1 [Camelot was the capital of King Arthur's ideal society of chivalric literature from the 10th to the 13th centuries. It proved unfeasible because good intentions belied human nature.—ED.] [27]
es» PART II Keynes's Legacy to Great Britain: Tolly in a Great Kingdom' JOHN BURTON
Page 1 and 2: The Consequences of Mr Keynes J. M.
Page 3 and 4: INSTITUTE OF ECONOMIC AFFAIRS The I
Page 5 and 6: First published April igy8 Second I
Page 7 and 8: B. The Pre-Keynesian British Fiscal
Page 9 and 10: PREFACE The Hobart Papers are inten
Page 11 and 12: Hobart Paper 78 is, in effect, an a
Page 13 and 14: PART I Democracy and Keynesian Cons
Page 15 and 16: economic stability was replaced in
Page 17 and 18: hortations to politicians to promot
Page 19 and 20: c KEYNESIAN PRESUPPOSITIONS, DEMOCR
Page 21 and 22: supporting various-sized budgets, a
Page 23 and 24: Budget surpluses clearly have weake
Page 25 and 26: D. THE DESTRUCTIVE, SELF-FULFILLING
Page 27: These readjustments will disturb a
Page 31 and 32: A. BRITAIN'S CHANGING FISCAL HISTOR
Page 33 and 34: The Keynesian budgetary record In t
Page 35 and 36: a surplus ever been encountered. In
Page 37 and 38: Britain is almost unique amongst co
Page 39 and 40: The cohesion and functioning of the
Page 41 and 42: institutional framework. Faced with
Page 43 and 44: National Debt escalated over ten-fo
Page 45 and 46: purse, a change of fiscal attitude
Page 47 and 48: 5 THE GOVERNMENT would no longer be
Page 49 and 50: like ninepins'. 1 He could not have
Page 51 and 52: would be the way to hell if they we
Page 53 and 54: Thus, Keynes foresaw economists in
Page 55 and 56: wages up in spite of heavy unemploy
Page 57 and 58: public debt in peacetime'. Lord Kal
Page 59 and 60: followers anticipated. Many Keynesi
Page 61 and 62: 'The role of the economist as the i
Page 63 and 64: taxes or duties, or for an increase
Page 65 and 66: growth and deficit finance. Indeed,
Page 67 and 68: TABLE III THE 'HUMP EFFECT': PESC P
Page 69 and 70: comprises spending on private goods
Page 71 and 72: ward excluded from total government
Page 73 and 74: 'could not be costed accurately eno
Page 75 and 76: there is no 'problem' of explanatio
Page 77 and 78: In the long run—when, pace Mr Key
Page 79 and 80:
A. FATALISM VERSUS REFORM This Pape
Page 81 and 82:
concern about the conduct of budget
Page 83 and 84:
Orderly transition to full implemen
Page 85 and 86:
First, there is simply no evidence
Page 87 and 88:
QUESTIONS FOR DISCUSSION i. Compare
Page 89 and 90:
Some IEA Papers on Aspects of the N
Page 91 and 92:
Five Outstanding IEA Books The Theo
Page 93 and 94:
The Economics of Charity A. A. ALCH
Page 95 and 96:
[continued from back cover _ 5. The
Page 97:
Summary of The Consequences of Mr K
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