Conrad Black writes Battle of the Cliches in The National Review


In economics, Keynes and Hayek have become simplistic labels, Keynes for spending out of recessions with deficit financing and Hayek for economic shrinkage of government. In fact, 75 percent of what both of them wrote about economics was bunk. Keynes believed that there was a natural balance in the economy of full employment and minimal inflation. There isn’t. He was right that public-sector spending is a better antidote to economic downturns than self-amplifying austerity, but that is almost the end of it. His theory of the role of reparations in the radicalization of inter-war Germany was almost completely false; his advice to President Roosevelt in the Thirties was, as FDR considered it, patronizing and inaccurate, and the Federal Reserve chairman, Marriner Eccles, a Utah Mormon, gave better advice without Keynes’ condescensions. Hayek was a great political philosopher, emphasizing the role and vitality of individual liberty, but his economic views led to a minimal-growth policy of virtual public-sector abstention from economic activity, a policy that comports many hazards.