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Failure of the "New Economics", The

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A line-by-line commentary and refutation of one of the most destructive, fallacious, and convoluted books of the century.
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Henry Hazlitt did the seemingly impossible, something that was and is a magnificent service to all people everywhere. He wrote a line-by-line commentary and refutation of one of the most destructive, fallacious, and convoluted books of the century. The target here is John Maynard Keynes's General Theory, the book that appeared in 1936 and swept all before it.

In economic science, Keynes changed everything. He supposedly demonstrated that prices don't work, that private investment is unstable, that sound money is intolerable, and that government was needed to shore up the system and save it. It was simply astonishing how economists the world over put up with this, but it happened. He converted a whole generation in the late period of the Great Depression. By the 1950s, almost everyone was Keynesian.

But Hazlitt, the nation's economics teacher, would have none of it. And he did the hard work of actually going through the book to evaluate its logic according to Austrian-style logical reasoning. The result: a 500-page masterpiece of exposition.

Murray Rothbard was blown away.

Keynes' General Theory is here riddled chapter by chapter, line by line, with due account taken of the latest theoretical developments. The complete refutation of a vast network of fallacy can only be accomplished by someone thoroughly grounded in a sound positive theory. Henry Hazlitt has that groundwork.

An "Austrian" follower of Ludwig von Mises, he is uniquely qualified for this task, and performs it surpassingly well. It is no exaggeration to say that this is by far the best book on economics published since Mises' great Human Action in 1949. Mises' work set forth the completed structure of the modern "Austrian" theory. Hazlitt's fine critique of Keynes, based on these principles, is a worthy complement to Human Action.

Henry Hazlitt, a renowned economic journalist, is a better economist than a whole host of sterile academicians, and, in contrast to many of them, he is distinguished by courage: the courage to remain an "Austrian" in the teeth of the Keynesian holocaust, alongside Mises and F. A. Hayek. On its merits, this book should conquer the economics profession as rapidly as did Keynes.

But whether the currently fashionable economists read and digest this book or not is, in the long run, immaterial; it will be read, and it will destroy the Keynesian System. At the very least, there is now a new generation under thirty-five, to bring this message to fruition.

Far from being a dull read, this book has all the brightness and clarity we've come to expect from Hazlitt. He is a dazzling writer, and one can't but thrill to see him in the ring with the giant Keynes. By the time he delivers the knockout punch--taking on Keynes's suggestion that we nationalize investment--there is nothing left of his opponent.

By now, Keynesian theory is so woven into both theory and policy that hardly anyone notices it anymore. But this Hazlitt book helps us stand up and take notice of the extent to which we've allowed sheer fallacy to dominate our thinking.

This new edition by the Mises Institute is a pleasure to release, after so many years of being out of print. Hazlitt lives again to give Keynes the treatment he deserves and yet no one else dared give him.

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by Don
on 3/27/2013
An excellent in-depth analysis of Keynes
If you search for a good grounding, from which to spot the errors and eventual disasters coming from our current "political" economy and the central-planners trying to run it, you won't find a better cache of intellectual ammunition than contained in this book. Mr. Hazlitt actually gives the best summary of Keynes' Magnum Opus, by saying: "What is original in the book (Keynes' General Theory) is not true; and what is true is not original". He then goes on to prove it in the greatest of detail.
by matthew
on 8/6/2010
MUST READ !! !
Hazlitt is a joy to read. If an economist could only read five books, this should be one of them!
by Ibrey
on 4/20/2010
Prepare to plagiarise this all the time
Before I read this book, I didn't know much about Keynesian theory, but Hazlitt's many quotes from Keynes (and extensive commentary) make it clear that Keynesian theory is crankier than I ever imagined. If you've ever been told that Keynes preached government thrift in the boom and largess in the bust, you are going to love pp. 329–332. Hazlitt's writing makes the book a joy to read. On occasion, I found myself turning to the table of contents just to see what topics I had to look forward to. You won't believe how many ways he finds to say, "Keynes succeeds in packing so many fallacies into this passage that it is difficult to know where to begin." Refuting Keynes's tortured logic necessitates the exposition of a great deal of positive theory. Novices will find this an excellent intermediate introduction to Austrian economics, with Hazlitt spending a great deal of time on employment, capital, interest, and money because those are the subjects Keynes dealt with.
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ISBN 9781933550114
eISBN 9781610164504
Publisher Ludwig von Mises Institute
Publication Date 2007
Original Publication Date 1959
Binding PB
Page Length 470

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