Keynes the Man.pdf - The Ludwig von Mises Institute

58 Keynes, the Manhigher than any principles, higher than any mere ideas, a man whorelished the power he held. He could and would turn the world, setit right with a snap of his fingers, as he presumed to have done inthe past.Moreover, this statement was also vintage Keynes in terms ofhis long-held view of how to act properly when in or out of power.In the 1930s, prominent but out of power, he could speak and act“a little wild”; but now that he enjoyed the high seat of power, itwas time to tone down the “poetic license.” Joan Robinson and theother Marxo-Keynesians were making the mistake, from Keynes’spoint of view, of not subordinating their cherished ideas to therequirements of his prodigious position of power.And so Hayek too, while never succumbing to Keynes’s ideas,did fall under his charismatic spell. In addition to creating thelegend of Keynes’s change of heart, why did Hayek not demolishThe General Theory as he had Keynes’s Treatise on Money? Hayekadmitted to a strategic error, that he had not bothered to do sobecause Keynes was notorious for changing his mind, so Hayekdid not think then that The General Theory would last. Moreover,as Mark Skousen has noted in chapter 1 of this volume, Hayekapparently pulled his punches in the 1940s in order to avoid interferingwith Britain’s Keynesian financing of the war effort—certainlyan unfortunate example of truth suffering at the hands ofpresumed political expediencyLater economists continued to hew a revisionist line, maintainingabsurdly that Keynes was merely a benign pioneer of uncertaintytheory (Shackle and Lachmann), or that he was a prophet ofthe idea that search costs were highly important in the labor market(Clower and Leijonhufvud). None of this is true. That Keyneswas a Keynesian—of that much derided Keynesian system providedby Hicks, Hansen, Samuelson, and Modigliani —is the onlyexplanation that makes any sense of Keynesian economics.Yet Keynes was much more than a Keynesian. Above all, hewas the extraordinarily pernicious and malignant figure that we