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Keynes and the Totalitarian State

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Tags Philosophy and MethodologyPolitical Theory

10/09/2007

More bon mots from Dr. Hulsmann's Mises - The Last Knight of Liberalism: "In the preface to the German edition [of his General Theory], Keynes boasted that his theory was particularly well suited for totalitarian regimes and lamented that it was less fit for the conditions prevailing in freer societies."

On p. xxvi of his Collected Writings Keynes writes: "Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire."

Mises writes in summation and as a general response in "Lord Keynes and Say's Law," in Hazlitt, ed., The Critics of Keynesian Economics, p. 319: "The policies he advocated were precisely those which almost all governments, including the British, had already adopted many years before his "General Theory" was published. Keynes was not an innovator and champion of new methods of managing economic affairs. His contribution consisted rather in providing an apparent justification for the policies which were popular with those in power in spite of the fact that all economists viewed them as disastrous. His achievement was a rationalization of the policies already practiced."

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