Rothbard A to Z

KANT, IMMANUEL

My own epistemological position rests on Aristotle and St. Thomas rather than Kant …

Economic Controversies, p. 108

KEYNES, JOHN MAYNARD

John Maynard Keynes, the man—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was his strong sense that he was born into, and destined to be a leader of, Great Britain’s ruling elite.

Both of these traits led Keynes to deal with people as well as nations from a self-perceived position of power and dominance. The third element was his deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life.

Keynes, the Man, p. 9

… homosexuality was morally superior to heterosexuality.

Keynes, the Man, p. 15n3

… Maynard Keynes was a distinguished Bloomsbury member.

Keynes, the Man, p. 18

… Keynes and his friends were attracted not so much to [G.E.] Moore’s doctrine itself as to the particular interpretation and twist that they themselves gave to that doctrine. Despite their enthusiasm, Keynes and his friends accepted only what they held to be Moore’s personal ethics (i.e., what they called Moore’s “religion”), while they totally rejected his social ethics (i.e., what they called his “morals”).

… They repudiated, however, all social morals or general rules of conduct …

Keynes, the Man, pp. 19–20

… Keynes’s first important scholarly book, A Treatise on Probability (1921) … grew out of his attempt to copper rivet his rejection of Moore’s proposed general rules of morality.

Keynes, the Man, p. 21

… Keynes, the statist and rationalist central planner.

Keynes, the Man, p. 23

… Keynes was also sure that devotion to the truth was merely a matter of taste, with little or no place in polities. …

Indeed Keynes displayed a positive taste for lying in politics. He habitually made up statistics to suit his political proposals …

Keynes, the Man, p. 24

… was eager to desert his earlier beliefs and change his mind on a dime, depending on the situation.

… Never did any soul-searching or even hesitation seem to hobble his lightning-fast changes.

… Keynes, however, did not trouble himself about charges of inconsistency, considering himself always right. It was particularly easy for Keynes to adopt this conviction since he cared not a tap for principle. He was therefore always ready to change horses in pursuit of expanding his ego through political power.

Keynes, the Man, pp. 25–26

The young Keynes displayed no interest whatsoever in economics; his dominant interest was philosophy. In fact, he completed an undergraduate degree at Cambridge without taking a single economics course.

Keynes, the Man, p. 31

… blithely assumed that British rule was not to be questioned …

Keynes, the Man, p. 33

Keynes generally liked to tackle economic theory in order to solve practical problems.

Keynes, the Man, p. 36

… ignorance cannot account for Keynes’s claim that he was the first economist to try to explain unemployment or to transcend the assumption that money is a mere veil exerting no important influence on the business cycle or the economy. Here we must ascribe to Keynes a deliberate campaign of mendacity and deception—what would now be called euphemistically “disinformation.”

Keynes, the Man, p. 43

… believed that capital is not really scarce at all.

Keynes, the Man, p. 48

… the most convincing evidence of Keynes’s strong fascist bent was the special foreword he prepared for the German edition of The General Theory.

Keynes, the Man, p. 51

Keynes firmly rejected communism …

Keynes, the Man, p. 52

… Keynes had long been anti-Semitic.

Keynes, the Man, p. 53

… the major reason for Keynes’s rejection of communism was simply that he could scarcely identify with the grubby proletariat. …

… John Maynard Keynes was a lifelong member of the British aristocracy, and he was not about to forget it.

Keynes, the Man, p. 54

Keynes was abysmally read in the economic literature …

Keynes, the Man, p. 55

… Keynes was … fueled by an arrogance bordering on egomania.

Keynes, the Man, p. 55

Clearly, Keynes was bright enough, but his most significant qualities were his arrogance, his unlimited self-confidence, and his avid will to power, to domination, to cutting a great swath through the arts, the social sciences, and the world of politics.

Furthermore, Keynes was scarcely a “revolutionary” in any real sense. He possessed the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of statism and socialism, of managed and planning economies. Keynes eliminated economic theory’s ancient role as spoilsport for inflationist and statist schemes, leading a new generation of economists on to academic power and to political pelf and privilege.

A more fitting term for Keynes would be “charismatic”—not in the sense of commanding the allegiance of millions but in being able to con and seduce important people—from patrons to politicians to students and even to opposing economists.

Keynes, the Man, pp. 55–56

… was a fascist and an anti-Semite.

Keynes, the Man, p. 56

… Keynes was much more than a Keynesian. Above all, he was the extraordinarily pernicious and malignant figure … a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the 20th century.

Keynes, the Man, pp. 58–59

… Lord Keynes, the economist-saint of modern state capitalism …

Left and Right, p. 230

KEYNESIAN ECONOMICS

… Keynesianism is intellectually bankrupt …

America’s Great Depression, p. xvii

… the rate of interest depends solely on time preference, and not at all on “liquidity preference.”

America’s Great Depression, p. 40

Hoarding, therefore, lowers prices all round, but need exert no depressing effect whatever upon business.

America’s Great Depression, p. 51

… Keynes ignored the various stages of production; ignored changes in capital value and neglected the identity between entrepreneurs and capitalists; took replacement of the capital structure for granted; neglected price differentials in the stages of production as the source of interest; and did not realize that, ultimately, the question faced by businessmen is not whether to invest in consumer goods or capital goods, but whether to invest in capital goods that will yield consumer goods at a nearer or later date.

America’s Great Depression, p. 37n1

The inflationary recession that first appeared dramatically in the 1973–74 contraction put an end to a thirty-five-year period of arrogant and unquestioned hegemony by the Keynesian wing of the neoclassical synthesis. For Keynesian theory and policy rested on the crucial assumption that inflationary recession simply cannot happen.

Economic Controversies, p. 133

For Keynes, the key to prosperity or depression was private investment: flourishing private investment means prosperity; weak and fitful investment leads to depression.

Economic Controversies, p. 274

In reality, the macro and micro spheres are integrated and intertwined, as the Austrians have shown. It is impossible to concede the macro sphere to the State while attempting to retain freedom on the micro level. Any sort of tax, and the income tax not least of all, injects systematic robbery and confiscation into the micro sphere of the individual, and has unfortunate and distortive effects on the entire economic system.

Economic Controversies, p. 898

… the attitude of Keynesians toward booms and bust is simplicity, even naïvete, itself.

Economic Depressions: Their Cause and Cure, p. 9

A robber who justified his theft by saying that he really helped his victims, by his spending giving a boost to retail trade, would find few converts; but when this theory is clothed in Keynesian equations and impressive references to the “multiplier effect,” it unfortunately carries more conviction.

Egalitarianism as a Revolt Against Nature, p. 69

Money-crankism assumes (1) that more and ever more money is needed on the market; (2) that the lower the interest rate the better; and (3) that the interest rate is determined by the quantity of money, the former being inversely proportional to the latter. Given this set of totally fallacious assumptions, the prescription follows: keep increasing the quantity of money and lowering the rate of interest (or profits).

… it must be concluded that money-cranks are simply pushing to its logical conclusion a fallacy adopted widely by preclassical and by current Keynesian writers.

Egalitarianism as a Revolt Against Nature, pp. 211–12

… the rate of interest … is not a function of the quantity of money. It is a function of “time preference,” of the rate at which people prefer satisfactions in the present to the same satisfactions in the future. …

… time preference is deeply rooted in human nature and the nature of man; it is not in the least a monetary phenomenon but would be just as true in a world of barter.

Egalitarianism as a Revolt Against Nature, pp. 215

After forty years of Keynesian policies which were supposed to “fine tune” the economy so as to eliminate the boom-bust cycle of inflation and depression, the United States managed to experience both at the same time …

Ethics of Liberty, p. 270

… a thief who presumed to justify his theft by saying that he was really helping his victims by his spending, thus giving retail trade a needed boost, would be hooted down without delay. But when this same theory is clothed in Keynesian mathematical equations and impressive references to the “multiplier effect,” it carries far more conviction with a bamboozled public.

For a New Liberty, p. 73

This curious phenomenon of a vaunting inflation occurring at the same time as a steep recession was simply not supposed to happen in the Keynesian view of the world. Economists had always known that either the economy is in a boom period, in which case prices are rising, or else the economy is in a recession or depression marked by high unemployment, in which case prices are falling. In the boom, the Keynesian government was supposed to “sop up excess purchasing power” by increasing taxes, according to the Keynesian prescription—that is, it was supposed to take spending out of the economy; in the recession, on the other hand, the government was supposed to increase its spending and its deficits, in order to pump spending into the economy. But if the economy should be in an inflation and a recession with heavy unemployment at the same time, what in the world was government supposed to do? How could it step on the economic accelerator and brake at the same time?

For a New Liberty, p. 214

… Lord Keynes’s economics have proved to be the economics par excellence of the corporate liberal State. For Keynesian economists place equal approval upon all forms of government spending, whether on pyramids, missiles, or steel plants; by definition all of these expenditures swell the gross national product, regardless of how wasteful they may be.

For a New Liberty, p. 350

… now Keynes is dead and we are alive, living in his long run.

For a New Liberty, p. 396

… The General Theory was not truly revolutionary at all but merely old and oft-refuted mercantilist and inflationist fallacies dressed up in shiny new garb, replete with newly constructed and largely incomprehensible jargon.

Keynes, the Man, p. 37

In The General Theory, Keynes set forth a unique politico-economic sociology, dividing the population of each country into several rigidly separated economic classes, each with its own behavioral laws and characteristics, each carrying its own implicit moral evaluation.

Keynes, the Man, p. 47

… Keynes came to this interpretation of the business cycle as a good Marshallian.

Keynes, the Man, p. 49

… Keynes [would] let the state control investment completely …

… [and] desired … private ownership, subject to comprehensive government control and planning. This was, of course, fascism.

Keynes, the Man, pp. 50–51

Keynes eliminated economic theory’s ancient role as spoilsport for inflationist and statist schemes …

Keynes, the Man, p. 55

That Keynes was a Keynesian—of that much derided Keynesian system provided by Hicks, Hansen, Samuelson, and Modigliani—is the only explanation that makes any sense of Keynesian economics.

Yet Keynes was much more than a Keynesian. Above all, he was the extraordinarily pernicious and malignant figure … a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the 20th century.

Keynes, the Man, pp. 58–59

… Lord Keynes, the economist-saint of modern state capitalism …

Left and Right, p. 230

The phenomenon of inflationary recession cannot be understood by Establishment economists, whether of the Keynesian or the Milton Friedman variety. Neither of these prominent groups has any tools to understand what is going on. Both Keynesians and Friedmanites see business cycles in a very simpleminded way; business fluctuations are basically considered inexplicable, causeless, due to arcane changes within the economy …

For both Keynesians and Friedmanites have essentially one set of recommended policies for business fluctuations. In an inflationary boom, taxes are supposed to rise, monetary policy to be more stringent; in various ways, and with different emphases among the two groups, money is taken out of, or not fed into, the economy. Conversely, during a recession, money is fed into the economy, deficits are incurred, and the economy stimulated. But, during recessions, activity and employment are supposed to be falling off, and prices falling; what happens if prices are still rising? Our economic managers are then caught on the horns of an escapable dilemma; if they pump money into the economy, they may turn around the recession, but then prices will gallop away at an alarming rate; and if they tighten the monetary screws in order to stop the inflation, then recession and unemployment will deepen alarmingly.

Libertarian Forum v. 1, pp. 121–22

Economists used to have an instructive term for the man who comes up habitually with a single technocratic gimmick to solve deep and complex economic problems. Such a man used to be called a “crank.”

Libertarian Forum v. 1, p. 470

One of the main reasons for the popularity of Karl Marx and John Maynard Keynes among intellectuals was precisely the staggering obscurity of their prose; only when a writer is obscure can a cult of followers gather around to serve as the semi-official interpreters and exegetes of the Master.

Libertarian Forum v. 1, p. 530

… the Keynesian policies of the federal government have stopped neither inflation nor depression, as the arrogant economic Establishment had promised … the only thing they succeeded in doing was to prevent deflation and hence to prevent consumers from enjoying the one thing that made past depressions palatable: a fall in the cost of living. Government tinkering with the economy has not cured business cycles; it has only brought us the new phenomenon of inflationary depression, of the worst of both worlds at the same time.

Libertarian Forum v. 1, p. 549

… Keynesian mixed economy, fascism … was only the old discredited mercantilism in a new form …

Libertarian Forum v. 1, p. 573

Contrary to the Keynesians, growth and employment are no longer correlated, and inflation is no longer a tradeoff for unemployment …

Libertarian Forum v. 2, p. 749

… our own Keynesian welfare-warfare state [is] neo-mercantilism or state monopoly capitalism.

Libertarian Forum v. 2, p. 764

If anything, we have a reverse Phillips curve.

Making Economic Sense, p. 14

The hallmark of crackpot economics is an analysis that somehow leaves out prices, and talks only about such aggregates as income, spending, and employment.

Making Economic Sense, p. 44

The Keynesians have the entire causal process bollixed up.

Making Economic Sense, p. 45

… Keynesianism has become the pure economics of power …

Making Economic Sense, p. 47

… right-wing Keynesians advocate high deficits, high taxes, and manipulation of the budget and of monetary policy to try to achieve full employment without inflation. The result has been permanent inflation plus periodically steep recessions. Left-wing Keynesians, the hallmark of Democrat administrations, hold a similar macro view, except that they favor bigger inflations and higher taxes than their more conservative counterparts. The major difference comes in “micro-economic policy” …

Making Economic Sense, p. 117

… everyone still acts as if the Keynesian hokum of the “inflation-unemployment tradeoff” (the so-called “Phillips curve”) is a valid and self-evident insight. When will people realize that this “tradeoff” is about as correct as the forecast that the Soviet Union and the United States would have the same gross national product and standard of living …

Making Economic Sense, p. 172

… the Keynesian Phillips Curve, perhaps the greatest single and most absurd error in modern economics.

The Phillips Curve assumes that the choice is always either more recession and unemployment, or more inflation. In reality, the Phillips Curve, if one wishes to speak in those terms, is in reverse: the choice is either more inflation and bigger recession, or none of either.

Making Economic Sense, p. 181

We will never break out of our economic stagnation or our boom-bust cycles and achieve permanent prosperity until we have repudiated Keynes as thoroughly and as intensely as the peoples of Eastern Europe and the Soviet Union have repudiated Marx and Lenin. The real way to achieve freedom and prosperity is to hurl all three of these icons of the twentieth century into the dustbin of history.

Making Economic Sense, p. 258

… contrary to Keynesian myth, government spending is not “investment” at all (a cruel joke), but is wasteful “consumption” spending. The “consumers,” in this case, are the politicians and government officials who leech off the productive private sector.

Making Economic Sense, p. 268

… what the Keynesians want is no less than an internationally coordinated and controlled worldwide, paper-money inflation, a fine-tuned inflation that would proceed unchecked upon its merry way until, whoops!, it landed the entire world smack into the middle of the untold horrors of global runaway hyperinflation.

Making Economic Sense, p. 317

Internationally coordinated fiat money inflation is the Keynesian goal.

Making Economic Sense, p. 377

England was then the prestigious center of world economic thought, and Keynes had behind him the eminence of Cambridge University, as well as his own stature in the intellectual community. Add to this Keynes’s personal charm, and the fact that his allegedly revolutionary theory put the imprimatur of “economic science” behind statism and massive increases of government spending, and Keynesianism proved irresistible.

Making Economic Sense, p. 448

… there is little or no relationship between prosperity and consumers’ spending; indeed almost the reverse is true.

Man, Economy, and State with Power and Market, p. 403

The Keynesian system, as is quite clear from the mathematical portrayals of it given by its followers, suffers grievously from the mathematical-economic sin of “mutual determination.”

Man, Economy, and State with Power and Market, p. 785

… the concept of a consumption function has no place in economics at all.

Man, Economy, and State with Power and Market, p. 865

Resource-using expenditures by government are often considered “investment,” and this classification forms an essential part of the Keynesian doctrine.… on the contrary, all of this expenditure must be considered consumption. Investment occurs where producers’ goods are bought by entrepreneurs, not at all for their own use or satisfaction, but merely to reshape and resell them to others—ultimately to the consumers. But government redirects the resources of society to its ends, chosen by it and backed by the use of force. Hence, these purchases must be considered consumption expenditures, whatever their intention or physical result. They are a particularly wasteful form of “consumption,” however, since they are generally not regarded as consumption expenditures by government officials.

Man, Economy, and State with Power and Market, p. 1259

Keynesian economics—proudly proclaiming itself as “modern,” though with its roots deep in medieval and mercantilist thought—offers itself to the world as the panacea for our economic troubles.

Strictly Confidential, p. 223

All Keynesians conceive of the State as a great potential reservoir of benefits, ready to be tapped.

Strictly Confidential, p. 225

The Keynesian theory (or model) highly oversimplifies the real world by dealing with a few large aggregates, lumping together the activity of all individuals in a nation.

Strictly Confidential, p. 227

Consumption is not just a function of income; it depends, in a complex fashion, on the level of past income, expected future income, the phase of the business cycle, the length of the time period under discussion, on prices of commodities, on capital gains or losses, and on the cash balances of consumers.

Strictly Confidential, p. 233

… aggregative economics is a drastic misrepresentation of reality. The aggregates are merely an arithmetic cloak over the real world, where multitudes of firms and individuals react and interact in a highly complex manner. The alleged “basic determinants” of the Keynesian system are themselves determined by complex interactions within and between these aggregates.

Strictly Confidential, p. 234

All of Keynesian thinking is a tissue of distortions, fallacies, and drastically unrealistic assumptions.

Strictly Confidential, p. 239

Keynes contributed only mischief, fallacy, and obfuscation …

Strictly Confidential, p. 278

… “hoarding” never brings any loss to society.

What Has Government Done to Our Money?, p. 29

KNIGHT, FRANK

The dominant neoclassical strain at present is to be found in the system of Professor Frank Knight, of which the most characteristic feature is an attack on the whole concept of time preference.

Economic Controversies, p. 277

Frank Knight, the doyen of the Chicago School, was also an ardent believer in the Clarkian view that time preference has no influence on interest paid by producers, and that production is synchronized so that time plays no role in the production structure. Hence, Knight believed, along with modern orthodoxy, that capital is a homogeneous, self-perpetuating blob that has no lattice-like, time-oriented structure.

Economic Controversies, p. 839

The true nature of the distinction between interest and profit was not discovered until the work of Frank H. Knight …

Egalitarianism as a Revolt Against Nature, p. 212n4

Monetarism and Chicago School economics is really only a gloss on theories that had been hammered out before the Keynesian Era by Irving Fisher and by Frank Knight and his colleagues at the University of Chicago.

Making Economic Sense, p. 40

… assume[s] that, once produced, capital, in some mystical way, reproduces itself without further need for acts of saving.

Man, Economy, and State with Power and Market, p. 55n33

The Knight doctrine denies any role to time in production, asserting that production “now” (in a modern, complex economy) is timeless and that time preference has no influence on the interest rate. This doctrine has been aptly called a “mythology of capital.” Among other errors, it leads to the belief that there is no economic problem connected with the replacement and maintenance of capital.

Man, Economy, and State with Power and Market, p. 402

The dominant neoclassical strain at present is to be found in the system of Professor Frank Knight, of which the most characteristic feature is an attack on the whole concept of time preference. Denying time preference, and basing interest return solely on an alleged “productivity” of capital, the Knightians attack the doctrine of the discounted MVP and instead advocate a pure MVP theory.

Man, Economy, and State with Power and Market, p. 504

Professor Frank H. Knight has been the leader of the school of thought that assumes capital to be automatically permanent. Knight has contributed a great deal to economics in his analysis of profit theory and entrepreneurship, but his theories of capital and interest have misled a generation of American economists.

Man, Economy, and State with Power and Market, p. 535

KNOWLEDGE

… the knowledge that human beings have goals and act purposively to attain them rests, not simply on observing that human beings exist, but also on the introspective knowledge of what it means to be human possessed by each man, who then assents to this knowledge.

Economic Controversies, p. 34

… man obtains knowledge, which one hopes increases over time, of natural laws, and of the laws of cause and effect, which enable him to discover more and better ways of mastering nature and of bringing about his goals ever more effectively.

Economic Controversies, p. 173

… only a society with a standard of living considerably higher than subsistence can afford to devote much of its resources to improving knowledge and to developing a myriad of goods and services above the level of brute subsistence.

Economic Controversies, p. 602

… if knowledge buried in paradigms lost can disappear and be forgotten over time, then studying older economists and schools of thought need not be done merely for antiquarian purposes or to examine how intellectual life proceeded in the past. Earlier economists can be studied for their important contributions to forgotten and therefore new knowledge today. Valuable truths can be learned about the content of economics, not only from the latest journals, but from the texts of long-deceased economic thinkers.

Economic Thought Before Adam Smith, p. x

Unfortunately, in the science of economics, retrogression in knowledge has taken place almost as often as progression.

Man, Economy, and State with Power and Market, p. 357

… for a grasp of the consequences of acts of governmental intervention in the market or of union activity, knowledge of praxeology is requisite.

Man, Economy, and State with Power and Market, p. 712

To acquire knowledge of any field takes time, effort, and often money …

Man, Economy, and State with Power and Market, p. 741

The only knowledge we can have of the determinants of price is the knowledge deduced logically from the axioms of praxeology.

Man, Economy, and State with Power and Market, p. 835

Several thousand years of life among men, and of perfection upon it, have built up a pretty rigorous, and extensive body of objective knowledge of the nature of man, and what is best for him.

Rothbard vs. the Philosophers, p. 116