Milton Friedman on Keynes and the economics profession
I conclude that Keynes’s political bequest has done far more harm than his economic bequest and this for two reasons. First, whatever the economic analysis, benevolent dictatorship is likely sooner or later to lead to a totalitarian society. Second, Keynes’s economic theories appealed to a group far broader than economists primarily because of their link to his political approach.
Context. From his essay on John Maynard Keynes, written for the volume of commentaries accompanying a 1989 German facsimile edition of Keynes’s General Theory (1936) and published in English by the Federal Reserve Bank of Richmond in 1997. “Benevolent dictatorship” is his name for Keynes’s view that society is best improved by persuading well-meaning officials, chosen for their moral values, to follow economists’ advice.
Where this comes from
Checked against the sourceThe wording was checked against the work itself.
Cite this passage
Milton Friedman, “John Maynard Keynes” (Federal Reserve Bank of Richmond, Economic Quarterly, vol. 83, no. 2 (Spring 1997), pp. 1 to 23; first published in German translation in 1989, in the commentaries accompanying a facsimile edition of the General Theory (Verlag Wirtschaft und Finanzen, Düsseldorf)., 1997), p. 22. https://miltonfriedman.org/quotes/keynes-political-bequest-more-harm-benevolent-dictatorship-1997
Quoted for commentary and research. Rights in the underlying work remain with its rights holder, so cite the work itself, not only this page.
Topics
He also said
In judging Keynes’s overall influence on public policy, it is necessary to distinguish his bequest to technical economics from his bequest to politics. Keynes’s bequest to technical economics was strongly positive. His bequest to politics, in my opinion, was not. Yet I conjecture that his bequest to politics has had far more influence on the shape of today’s world than his bequest to technical economics. In particular, it has contributed greatly to the proliferation of overgrown governments increasingly concerned with every phase of their citizens’ daily lives.
Context. From his essay on John Maynard Keynes, written for the volume of commentaries accompanying a 1989 German facsimile edition of Keynes’s General Theory (1936) and published in English by the Federal Reserve Bank of Richmond in 1997. By Keynes’s “bequest to politics” he means the view, which he illustrates from Keynes’s 1944 letter praising Hayek’s Road to Serfdom, that planning is safe if those carrying it out hold the right moral values.
John Maynard KeynesJournal article, 1997, Federal Reserve Bank of Richmond, Economic Quarterly, vol. 83, no. 2 (Spring 1997), pp. 1 to 23; first published in German translation in 1989, in the commentaries accompanying a facsimile edition of the General Theory (Verlag Wirtschaft und Finanzen, Düsseldorf)., p. 20Checked against the sourceRead the originalSome years ago, I remarked to a journalist from Time magazine, “We are all Keynesians now; no one is any longer a Keynesian.” In regrettable journalist fashion, Time quoted the first half of what I still believe to be the truth, omitting the second half. We all use Keynesian terminology; we all use many of the analytical details of the General Theory; we all accept at least a large part of the changed agenda for analysis and research that the General Theory introduced. However, no one accepts the basic substantive conclusions of the book, no one regards its implicit separation of nominal from real magnitudes as possible or desirable, even as an analytical first approximation, or its analytical core as providing a true “general theory.”
Context. From his essay on John Maynard Keynes, written for the volume of commentaries accompanying a 1989 German facsimile edition of Keynes’s General Theory (1936) and published in English by the Federal Reserve Bank of Richmond in 1997. Here he describes how the General Theory’s influence on economists had changed since it appeared.
John Maynard KeynesJournal article, 1997, Federal Reserve Bank of Richmond, Economic Quarterly, vol. 83, no. 2 (Spring 1997), pp. 1 to 23; first published in German translation in 1989, in the commentaries accompanying a facsimile edition of the General Theory (Verlag Wirtschaft und Finanzen, Düsseldorf)., p. 6Checked against the sourceRead the originalI’ve had this experience many times. Get a dozen people in a room together, some of them economists and some non-economists, political scientists, sociologists, journalists, whatever they may be. Start any subject going. Within 15 minutes, all the economists will be on the same side, whatever their political persuasion is.
Context. Answering whether economists disagree on major issues. He goes on to say their differing political views derive “very little from their technical economic discipline.”
The Open MindInterview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)Checked against the sourceWatch it
Think this quote is wrong, misattributed, or missing context? Report it and it gets fixed, not argued with.