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The Koch Brothers' Favorite Economist Moves to War Keynesianism.

Gary North - June 18, 2014
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Yesterday, I published an article on Tyler Cowen. I argued that he has gone Keynesian. This of course assumes that he was not previously a Keynesian.

Maybe you thought: "So what?" Today, I want to explain why this is significant.

Tyler Cowen is the director of the Mercatus Center of George Mason University.

The multi-billionaire industrialist Charles Koch is on the Board of Directors of the Mercatus Center.

The Kochs gave $3.7 million to the Center, 2007-2011. They are its major supporters.

I can understand why the Kochs gave $10 million to the Institute for Humane Studies. There are lots of non-Keynesian economists who could be funded through IHS. The founder of IHS, F. A. Harper, recruited me to Austrian economics in 1961. He did his best to see I would not go in a Keynesian direction -- a possibility that never tempted me.

In the fall of 1962, Harper sent me a copy of Murray Rothbard's masterpiece, Man, Economy, and State. Harper had arranged its publication through a subsidy to the publisher.

The Kochs have a reputation of being staunch libertarians. Then why fund an organization run by someone who believes that government spending on the military is a source of economic growth? This is Keynesianism, pure and simple. This is big government conservatism.

Keynesian economists get enough support from the Establishment. They provide the intellectual justification for the Establishment. They don't need Koch money to get a hearing.

I don't think the mainstream media have paid attention to what is going on here. Here is the mainstream media's slant: "The Kochs' are trying to take over the Republican Party. They are moving it toward pure, unadulterated libertarianism." But politics is always a two-way street. It is about giving a little to get something. The fundamental premise of politics is the #1 premise of free market economics: "You can't get something for nothing. There are no free lunches." You go along to get along.

Mainstream Republicanism embraced the policies of war Keynesianism in the late 1940's. This has long been the bipartisan position of the American Establishment. This is the "guns" side of "guns and butter" Keynesianism.

It is not libertarianism.

I have no connection to the Kochs. I do not know what motivates them. But I know this much: once political influence becomes someone's motivation, non-ideological arrangements are usually close at behind.

When The New York Times publishes a war Keynesianism article by the Koch's favorite economist, that deserves an article in The New York Times, or at least The Huffington Post. There is a story here.

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