THE CONSEQUENCES OF MR KEYNES.pdf - Institute of Economic ...

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CONTENTS PREFACE Arthur Seldon 7 THE AUTHORS IO SIGNIFICANCE: The importance of the proposals for the British Reader between pp. 45-46 PART I: DEMOCRACY AND KEYNESIAN CONSTITUTIONS: POLITICAL BIASES AND ECONOMIC CONSEQUENCES James M. Buchanan and Richard E. Wagner I I A. Visions ofthe Economic Order: Classical and Keynesian 13 From Classical stability to Keynesian instability 13 B. The Idealised Environment for Keynesian Economic Policy 14 Keynes's defective assumptions 16 C. Keynesian Presuppositions, Democratic Politics, and Economic Policy 18 Market and political competition: similarities and essential differences 18 Budgets: political gains and losses 19 (i) Budget surpluses and democratic politics 20 (ii) Budget deficits and democratic politics 22 (iii) Keynesian economics in political democracy 23 D. The Destructive, Self-fulfilling Character of the Keynesian Political Biases 24 Hayek's analysis of the impact of inflation 26 E. Conclusion 27 PART II: KEYNES'S LEGACY TO GREAT BRITAIN: 'FOLLY IN A GREAT KINGDOM' 29 John Burton A. Britain's Changing Fiscal History 31 The pre-Keynesian budgetary record 31 The Keynesian budgetary record 33 The displacement hypothesis 35 [3]
B. The Pre-Keynesian British Fiscal Constitution 36 The conventions of the fiscal constitution in 19th-century Britain 37 The cohesion and functioning of the British 19th-century fiscal constitution 39 The establishment ofthe balanced-budget rule in 19th-century Britain 41 The pressures towards excessive expenditure and deficit finance in the 19th century 44 C. The Presuppositions of John Maynard Keynes 47 (1) 'The public interest' 47 (2) The philosopher-king hypothesis ofthe British ruling elite 48 (3) The elite's power of persuasion 49 The Bloomsbury View 49 The dentist model of the economic adviser 50 D. The Keynesian British Fiscal Constitution—in Theory 51 (i) Meade 52 (ii) Dalton 53 (iii) Kaldor 54 Conclusion 55 E. The Keynesian British Fiscal Constitution—in Reality 56 Keynesian presuppositions v. Whitehall/ Westminster realpolitik 57 F. The Failure of Remedial Measures 61 Plowden and PESC, 1961: an attempt at reform 61 The crisis measures of 1976 67 A conversion ofthe policy-makers? 69 An evaluation of the prospects 70 The November 1977 'reflation' 72 G. Conclusion: 'Folly in a Great Kingdom' 73 PART III: CONSTITUTIONAL OPTIONS FOR FISCAL CONTROL 77 J. M. Buchanan, J. Burton and R. E. Wagner A. Fatalism v. Reform 79 Force the helmsman to stop fiddling with the tiller? 80 [4]
Page 1 and 2: The Consequences of Mr Keynes J. M.
Page 3 and 4: INSTITUTE OF ECONOMIC AFFAIRS The I
Page 5: First published April igy8 Second I
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 and 28: These readjustments will disturb a
Page 29 and 30: es» PART II Keynes's Legacy to Gre
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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