Murray N. Rothbard 45wages, not money wages, and that he assumed only flexible wagerates (<strong>Keynes</strong> 1936, pp. 19–20, pp. 272–79).But, as Andrew Rutten notes, Pigou conducted a “real” analysisonly in <strong>the</strong> first part of his book; in <strong>the</strong> second part, he notonly brought money in, but pointed out that any abstraction frommoney distorts <strong>the</strong> analysis and that money is crucial to any analysisof <strong>the</strong> exchange system. Money, he says, cannot be abstractedaway and cannot act in a neutral manner, so “<strong>the</strong> task of <strong>the</strong> presentpart must be to determine in what way <strong>the</strong> monetary factorcauses <strong>the</strong> average amount of, and <strong>the</strong> fluctuation in, employmentto be different from what <strong>the</strong>y o<strong>the</strong>rwise would have been.”<strong>The</strong>refore, added Pigou, “it is illegitimate to abstract moneyaway [and] leave everything else <strong>the</strong> same. <strong>The</strong> abstraction proposedis of <strong>the</strong> same type that would be involved in thinking awayoxygen from <strong>the</strong> earth and supposing that human life continues toexist” (Pigou 1933, pp. 185, 212). Pigou extensively analyzed <strong>the</strong>interaction of monetary expansion and interest rates along withchanges in expectations, and he explicitly discussed <strong>the</strong> problem ofmoney wages and “sticky” prices and wages.Thus, it is clear that <strong>Keynes</strong> seriously misrepresented Pigou’sposition and that this misrepresentation was deliberate, since, if<strong>Keynes</strong> read any economists carefully, he certainly read suchprominent Cantabrigians as Pigou. Yet, as Rutten writes, “<strong>The</strong>seconclusions should not come as a surprise, since <strong>the</strong>re is plenty ofevidence that <strong>Keynes</strong> and his followers misrepresented <strong>the</strong>ir predecessors”(Rutten 1989, p. 14). <strong>The</strong> fact that <strong>Keynes</strong> engaged inthis systematic deception and that his followers continue to repeat<strong>the</strong> fairy tale about Pigou’s blind “classicism” shows that <strong>the</strong>re is adeeper reason for <strong>the</strong> popularity of this legend in <strong>Keynes</strong>ian circles.As Rutten writes,<strong>The</strong>re is one plausible explanation for <strong>the</strong> repetition of <strong>the</strong>story of <strong>Keynes</strong> and <strong>the</strong> classics. … This is that <strong>the</strong> standardaccount is popular because it offers simultaneously an explanationof, and a justification for, <strong>Keynes</strong>’s success: without <strong>the</strong>
46 <strong>Keynes</strong>, <strong>the</strong> <strong>Man</strong>General <strong>The</strong>ory , we would still be in <strong>the</strong> economic dark ages.In o<strong>the</strong>r words, <strong>the</strong> story of <strong>Keynes</strong> and <strong>the</strong> Classics is evidencefor <strong>the</strong> General <strong>The</strong>ory. Indeed, its use suggests that itmay be <strong>the</strong> most compelling evidence available. In this case,proof that Pigou did not hold <strong>the</strong> position attributed to him is… evidence against <strong>Keynes</strong>. … [This conclusion] raises <strong>the</strong> …serious question of <strong>the</strong> methodological status of a <strong>the</strong>ory thatrelies so heavily on falsified evidence. (Ibid., p. 15)In his review of <strong>The</strong> General <strong>The</strong>ory, Pigou was properly scornfulof <strong>Keynes</strong>’s “macédoine of misrepresentations,” and yet suchwas <strong>the</strong> power of <strong>the</strong> tide of opinion (or of <strong>the</strong> charisma of <strong>Keynes</strong>)that, by 1950, after <strong>Keynes</strong>’s death, Pigou had engaged in <strong>the</strong> sortof abject recantation indulged in by Lionel Robbins, which <strong>Keynes</strong>had long tried to wrest from him (Pigou 1950; Johnson and Johnson1978, p. 179; Corry 1978, p. 11–12).But <strong>Keynes</strong> used tactics in <strong>the</strong> selling of <strong>The</strong> General <strong>The</strong>oryo<strong>the</strong>r than reliance on his charisma and on systematic deception.He curried favor with his students by praising <strong>the</strong>m extravagantly,and he set <strong>the</strong>m deliberately against non- <strong>Keynes</strong>ians on <strong>the</strong> Cambridgefaculty by ridiculing his colleagues in front of <strong>the</strong>se studentsand by encouraging <strong>the</strong>m to harass his faculty colleagues. Forexample, <strong>Keynes</strong> incited his students with particular viciousnessagainst Dennis Robertson, his former close friend.As <strong>Keynes</strong> knew all too well, Robertson was painfully andextraordinarily shy, even to <strong>the</strong> point of communicating with hisfaithful, longtime secretary, whose office was next to his own, onlyby written memoranda. Robertson’s lectures were completely writtenout in advance, and because of his shyness he refused to answerany questions or engage in any discussion with ei<strong>the</strong>r his studentsor his colleagues. And so it was a particularly diabolic torture for<strong>Keynes</strong>’s radical disciples, led by Joan Robinson and Richard Kahn,to have baited and taunted Robertson, harassing him with spitefulquestions and challenging him to debate (Johnson and Johnson1978, pp. 136ff.).
- Page 2: Keynes,the Man
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- Page 8: ContentsKeynes, the Man . . . . . .
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- Page 14 and 15: Murray N. Rothbard 13The Cambridge
- Page 16 and 17: Murray N. Rothbard 15Or, as Maynard
- Page 18 and 19: Murray N. Rothbard 17BloomsburyAFTE
- Page 20 and 21: Murray N. Rothbard 19The Moorite Ph
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- Page 29 and 30: 28 Keynes, the ManAnother aspect of
- Page 31 and 32: 30 Keynes, the Manhad managed to do
- Page 33 and 34: 32 Keynes, the Manspeculations” (
- Page 35 and 36: 34 Keynes, the ManDespite his rise
- Page 37 and 38: 36 Keynes, the Manwas unable to con
- Page 39 and 40: 38 Keynes, the Manthe contrary , it
- Page 41 and 42: 40 Keynes, the Manworld. For a cent
- Page 43 and 44: 42 Keynes, the Manthis attitude, as
- Page 45: 44 Keynes, the Manoverinvestment in
- Page 50 and 51: Murray N. Rothbard 49and robotic co
- Page 52 and 53: Murray N. Rothbard 51could still re
- Page 54 and 55: Murray N. Rothbard 53“Russian com
- Page 56 and 57: Summing UpWAS KEYNES, as Hayek main
- Page 58 and 59: Murray N. Rothbard 57book … moral
- Page 60 and 61: Murray N. Rothbard 59have examined
- Page 62 and 63: BibliographyBrunner, Karl. 1987.
- Page 64 and 65: Murray N. Rothbard 63______.1930a.
- Page 66: Murray N. Rothbard 65Trescott, Paul