Thomas Palley: The General Theory at 80

Frequent D&S blog contributor Thomas Palley has a new paper out, “The General Theory at 80: Reflections on the History and Enduring Relevance of Keynes’ Economics.”  Here’s the abstract:

This paper reflects on the history and enduring relevance of Keynes’ economics. Keynes unleashed a devastating critique of classical macroeconomics and introduced a new replacement schema that defines macroeconomics. The success of the Keynesian revolution triggered a counter-revolution that restored the classical tradition and now enforces a renewed classical monopoly. That monopoly has provided the intellectual foundations for neoliberalism which has produced economic and political conditions echoing the 1930s. Openness to Keynesian ideas seems to fluctuate with conditions, and current conditions are conducive to revival of the Keynesian revolution. However, a revival will have to overcome the renewed classical monopoly.

You can find the full paper here.

One thought on “Thomas Palley: The General Theory at 80”

  1. We don’t have a “renewed classical monopoly.” Obama’s “stimulus” and his program to destroy used automobile engines were Keynesian, and would have been rejected by a minimally competent classical political economist. What we actually have is a near monopoly of neoclassical economics, which is available in different flavors. If we really want to address our fundamental economic problems, we need to reject the errors of the neoclassicals, with their failure to distinguish between land and capital, and apply the wisdom of Henry George, who corrected the errors of previous classical political economists, and gave an imperfect, but basically sound explanation of how land monopoly and land speculation lead to poverty, unemployment, and periodic financial crises and depressions.

    Please not that I do not hold the neoclassical economists in utter contempt; the marginal revolution did improve our understanding in some important respects. I do believe that the failure of much of neoclassical economics to distinguish land from capital was a grave error. I also think that Keynes was a neoclassical, and that Keynesian economics is supported neither by logic nor by evidence. Keynesian policies often fail to address real problems, and lead to stagflation, a phenomenon which Keynesians have difficulty explaining.

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