"The tradition continues through the years. In 2005 the right-wing magazine Human Events listed Keynes’s “General Theory” among the 10 most harmful books of the 19th and 20th centuries, right up there with “Mein Kampf” and “Das Kapital.”
Why such animus against a book with a “moderately conservative” message? Part of the answer seems to be that even though the government intervention called for by Keynesian economics is modest and targeted, conservatives have always seen it as the thin edge of the wedge: concede that the government can play a useful role in fighting slumps, and the next thing you know we’ll be living under socialism. The rhetorical amalgamation of Keynesianism with central planning and radical redistribution — although explicitly denied by Keynes himself, who declared that “there are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition” — is almost universal on the right.
There is also the motive suggested by Keynes’s contemporary Michał Kalecki in a classic 1943 essay:
We shall deal first with the reluctance of the “captains of industry” to accept government intervention in the matter of employment. Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of “sound finance” is to make the level of employment dependent on the state of confidence.This sounded a bit extreme to us the first time we read it, but it now seems all too plausible. These days you can see the “confidence” argument being deployed all the time. For example, here is how Mort Zuckerman began a 2010 op-ed in the Financial Times, aimed at dissuading President Obama from taking any kind of populist line:
The growing tension between the Obama administration and business is a cause for national concern. The president has lost the confidence of employers, whose worries over taxes and the increased costs of new regulation are holding back investment and growth. The government must appreciate that confidence is an imperative if business is to invest, take risks and put the millions of unemployed back to productive work.There was and is, in fact, no evidence that “worries over taxes and the increased costs of new regulation” are playing any significant role in holding the economy back. Kalecki’s point, however, was that arguments like this would fall completely flat if there was widespread public acceptance of the notion that Keynesian policies could create jobs. So there is a special animus against direct government job-creation policies, above and beyond the generalized fear that Keynesian ideas might legitimize government intervention in general."
The "confidence" argument is a Field of Dreams confection.
"If you build it, they will come." is the logic of faith. It mistakes causality.
Goods do not command purchase no mater how clever advertisers become.
Demand leads supply.
Providing supply where there is no demand is a quick road to bankruptcy.
Advertising works hard to convert potential demand to real demand.
I thought I sent this off long ago.
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