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Classical economics

September 10, 2016

It’s been a rather full week for me in the configuration of publications and presentations all surrounding my classical approach to economics.

what's wrong with keynesian economics I received my copy of What’s Wrong with Keynesian Economic Theory?, a collection I have edited of thirteen articles by economists who had previously written critical articles about Keynesian theory. The authors come from every corner of the non-Keynesian world, and therefore you are guaranteed to like some approaches more than others. But at least it is in print, and there is at least this much evidence that the moronic use of public spending and low interest rates to create recovery has its enemies. You would think, given how badly our economies are performing, that there would be more, but such it is. Keynesian theory remains the most easily understood fallacy in economics, thus retaining its savour across the world. Although Keynesian policies never work in practice – other than to enrich our elites at the expense of the rest of us – it continues to be the basis for macroeconomic theory and is universally applied by governments.

The second publication is in our local history of economics journal, The History of Economics Review. It is an article on my second favourite text, Henry Clay’s Economics: an Introduction for the General Reader (Mill’s Principles is my favourite). I subtitled my paper, “The Best Introduction to Economics Ever Written” which it remains, and there is unlikely to be anything better written until the current mania for diagrams and Keynes is finally reversed. You can get a copy of the book at Abebooks for around $10 since it must have sold in the 100,000s given its publication history from 1916 to 1951. The reason for my own article is that 2016 is the hundredth anniversary of its first publication. As a third best alternative to Mill and Clay, I do recommend my own Free Market Economics: an Introduction for the General Reader. No points for working out where I got the title.

The third publication is in this month’s Quadrant which you can pick up at your local news agency for a mere $8.90. It is the best value publication in the country. There you can read a magazine full of interesting and important articles that surround my own. My article tells the story of the trek from using interest rates to allocate resources among competing ends to have become a useless policy tool directed at keeping inflation down by keeping unemployment up. If you’d like a taste of how we classical economists look at things, this would be a very good place to start.

As for the presentations, I have just come back from China where I discussed classical economic theory, under the name supply-side economics, with people who have begun to see the deep errors of following a demand-side approach to policy. They now understand what’s wrong with Keynes. They are now examining the supply-side alternative. You may not think that matters, but just watch what happens if they finally work it out.

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