Who Killed Maynard Keynes?
IN THIS SUMMARY
In the late 1970s, Robert Lucas, professor of economics at the University of Chicago, published The Death of Keynes, in which he stated that Keynesian economics was dead, having been replaced by "total chaos" in academic economic circles. Since diametrically opposed theories in economics can co-exist for decades, the controversy surrounding the viability of economic policy based on Keynesian theory versus policies based on competing theories rages on unabated. Is Keynes "dead" (no longer relevant in today's economic world)? If so, what brought about his demise? Or, do vestiges of Keynesian theory still exist, having evolved, by his design, to fit evolving economic realities? John Maynard Keynes was born in 1883, the year in which Karl Marx died. Though a scholar and part of the Bloomsbury set (adherents of G. E. More's Principia Ethica which repudiated politics or the pursuit of wealth), Keynes was actively involved in government and his interest in economics leaned toward practical applications rather than abstract theory. While he opposed government ownership of the means of production, he saw government as a counterweight to the private sector-as a manager of the national currency in foreign exchange markets or a stabilizer of the economy through compensatory fiscal action. This approach was an extension of his class consciousness-his feeling that the proper management of the economy could and should be entrusted to the intellectually elite.