The View From 1776
A Critique Of The Fed’s Economic Theory
In two articles, economist Robert Higgs explains why macroeconomic, Keynesian theories, after more than four years, have failed to produced promised results.
Recession and Recovery
Six Fundamental Errors of the Current Orthodoxy
To read the article, scroll down below the introductory pitch for the Independent Review.
- "Macroeconomics" is a supreme example of the harm done by applying abstract reasoning and excessive conceptualization to matters ruled by human behavior; the latter being governed by a multitude of varying motivations that frequently change and defy not only measurement but lack predictive qualiies.
In his great book, "Crisis and Leviathan," Higgs quotes Tom Wolfe as follows: "intellectuals, the specialists in the production and distribution of articulate social thought, are subject to fads; from time to tile they are carried away by one notion or another for no apparent reason."
Keynesian theories and macroeconomics represent such fads currently afflicting us, and we can hope they will soon pass. But, as the excellent historian Paul Johnson writes, it will not be before much harm has been done:
"Beware intellectuals. . . (they) follow certain regular patterns of behavior. . .That is what makes them, en masse, so dangerous, for it enables them ro create climates of opinion and prevailing orthodoxies, which themselves often generate irrational and destructive courses of action."
No concrete thinker with real life experience would fail to predict that flooding the market with paper money and credit could produce more good than bad results. Only an abstract dreamer can create such beautiful and fanciful, but irrational notions.Posted by BILL GREENE on 08/17 at 08:28 AM