Gary North

March 6, 2010

You must buy a copy of Keynes' General Theory of Employment, Interest, and Money. Then you should attempt to read it.

You will find that it is incoherent. This is not your ignorance; it is Keynes' abandonment of economic logic. It is also his misuse of older terminology.

Keynes was faking it. How do we know? Because he was ordinarily a master of prose. Read The Economic Consequences of the Peace (1919). Read Essays in Biography. The General Theory is incoherent because Keynes had to abandon clarity in order to promote nonsense.

The emperor in 1936 had no clothes.

I suggest that you begin with the following materials, in this order, all of which are for sale at the Mises Institute. Most are on-line for free in the Literature section.

Hunter Lewis, Where Keynes Went Wrong (2009). This may be the best book on Keynes since Hazlitt's 1959 book. It is as if we lost five decades. We must now make up for lost time.

Henry Hazlitt, The Failure of the "New Economics" (1959). Only Rothbard wrote better than Hazlitt. This is a line-by-line critique, written by a man with no college degree, decades into his career, who was not afraid to call a spade a spade. He recognized error when he encountered it.

Hazlitt (ed.), Critics of Keynesian Economics (1960). This is a collection of essays. It contained Mises' classic response, "Stones into Bread." Most of the articles are from professional journals and are therefore close to unreadable. Why free market economists think that unreadability wins debates astounds me. Unreadability favors statists, whose conclusions intellectuals and politicians want to accept.

John B. Egger, "Arthur Marget in the Austrian Tradition of the Theory of Money," Review of Austrian Economics (1995): http://mises.org/journals/rae/pdf/R82_1.pdf

Authur Marget, The Theory of Prices, 2 vols. (1938, 1942). Marget's almost painfully prolix exposition of price theory was aimed at Keynes. It was unknown at the time. It went down the memory hole before anyone could remember it.

W. H. Hutt, The Theory of Idle Resources (1939). This was Hutt's most important work. Written just before World War II broke out, it defends the idea that all known resources are owned, and that owners perform a valuable service in owning them. If resources are idle, they are idle because of statist tampering with pricing or exchange.

Hutt, The Keynesian Episode (1979), an update of Keynesianism: Retrospect and Prospect (1963). Unfortunately, the update is no more readable than the original.

Lionel Robbins, The Great Depression (1934). It was published by Macmillan, two years before McMillan published The General Theory. Robbins provides an explanation in terms of Austrian economics. He repudiated the book later in his career.

C. A. Phillips, T. F. McManus, and R. W. Nelson, Banking and the Business Cycle (1937), published by Macmillan. This is another account of the Great Depression in terms of the Austrian theory of money.

Benjamin M. Anderson, Economics and the Public Welfare (1949). Here, a former Chase Bank economist and UCLA professor of economics explains the Great Depression. He begins where all historians of the Great Depression should: the outbreak of World War I and the abolition of the international gold standard.

Murray N. Rothbard, America's Great Depression (1963). This is the best account of why the Great Depression lasted in the U.S.A., 1930-33: a combination of price floors, government regulation, and government spending. This book was ignored by academia until Paul Johnson resurrected it in Modern Times (1983). Had Rothbard lived to complete the third volume of his history of economic thought, he would have dissected Keynes.

For more information, come here:

www.KeynesProject.com