December 20, 2016

Keynesianism is broken: Get over it!

Comment on LordKeynes on ‘A Lecture by Robert Skidelsky on Keynes’s General Theory’

Blog-Reference and Blog-Reference and Blog-Reference on Dec 22 and Blog-Reference

Keynes based macroeconomics on logically and conceptually defective foundations and neither Post-Keynesians nor New Keynesians nor Anti-Keynesians have realized his foundational blunder for 80+ years.#1

Keynes defined the formal core of the General Theory as follows: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This syllogism is defective because Keynes never came to grips with profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al., 2010)

It is pretty obvious that an economist who cannot tell the difference between the fundamental economic magnitudes profit and income is a laughing stock. This holds for Keynes and to an even higher degree for After-Keynesians who have not spotted the foundational blunder in the last 80 years. Skidelsky is a case in point.

Keynesianism is provably false and therefore indefensible. Economic policy guidance of Keynesians has no sound scientific foundation and grave unintended consequences.#4

Egmont Kakarot-Handtke

#1 For details of the big picture see cross-references Keynesianism
#2 The final smackdown of blahblah-Keynesianism
#3 Macroeconomics ― dead since Keynes
#4 Rethinking deficit spending

Related 'Macro for retarded economists' and 'Rethinking macro' and  'Keynes’ message for contemporaries' and 'The Cambridge crap curriculum' and 'Marshall and the Cambridge school of plain economic gibberish' and 'How Keynes got macro wrong and Allais got it right' and 'Keynesianism as ultimate profit machine' and 'Keynes, Lerner, MMT, Trump and exploding profit' and 'Keynes ― the poster boy for the weakness of the economist’s mind' and 'In the grand scheme of things, Lord Keynes was only a small-time crook'. For details of the big picture see cross-references Scientific Incompetence.