by Mario Rizzo
Some mainstream opponents of Austrian economics have complained over the years that Austrian economics is a “religion.” I have no doubt that in the hands of some it is so. I shall leave it to others to explore this. However, in this post I want to give the reader a taste of the secular religiosity of Keynes’s 1940s followers.
After reading this, the reader should consider to what extent the intolerance to non-Keynesian ideas shown today by not-a-few journalists and economists wearing journalist hats is in the religious tradition of these early “Keynesians.” I simply post some excerpts from an article by Ludwig von Mises, addressed to the general public, called “Stones into Bread: The Keynesian Miracle” originally published sixty years ago in 1948. It was reprinted in a volume called Planning for Freedom.
John Maynard Keynes, late economic adviser to the British Government, is the new prophet of inflationism. The “Keynesian Revolution” consisted in the fact that he openly espoused the doctrines of Silvio Gesell. As the foremost of the British Gesellians, Lord Keynes adopted also the peculiar messianic jargon of inflationist literature and introduced it into official documents. Credit expansion, says the Paper of the British Experts of April 8, 1943, performs the “miracle . . . of turning a stone into bread.” The author of this document was, of course, Keynes. Great Britain has indeed traveled a long way to this statement from Hume’s and Mill’s views on miracles. …………..
Professor Seymour E. Harris has just published a stout volume of collected essays by various academic and bureaucratic authors dealing with Keynes’ doctrines as developed in his General Theory of Employment, Interest and Money, published in 1936. The title of the volume is The New Economics, Keynes’ Influence on Theory and Public Policy (Alfred A. Knopf, New York, 1947). ……………
The editor seems to be unable to conceive that any honest and uncorrupted man could disagree with Keynes. As he sees it, opposition to Keynes comes from “the vested interests of scholars in the older theory” and “the preponderant influence of press, radio, finance and subsidized research.” In his eyes, non-Keynesians are just a bunch of bribed sycophants, unworthy of attention. Professor Harris thus adopts the methods of the Marxians and the Nazis, who preferred to smear their critics and to question their motives instead of refuting their theses. ……………..
A few of the contributions are written in dignified language and are reserved, even critical, in their appraisal of Keynes’ achievements. Others are simply dithyrambic outbursts. Thus Professor Paul E. Samuelson tells us: “To have been born as an economist before 1936 was a boon—yes. But not to have been born too long before!” And he proceeds to quote Wordsworth:
“Bliss was it in that dawn to be alive,
But to be young was very heaven!”
Descending from the lofty heights of Parnassus into the prosaic valleys of quantitative science. Professor Samuelson provides us with exact information about the susceptibility of economists to the Keynesian gospel of 1936. Those under the age of 35 fully grasped its meaning after some time; those beyond 50 turned out to be quite immune, while economists in-between were divided. After thus serving us a warmed-over version of Mussolini’s giovanezza theme, he offers more of the outworn slogans of fascism, e.g., the “wave of the future.” ………….But the Keynesian miracle fails to materialize; the stones do not turn into bread. The panegyrics of the learned authors who cooperated in the production of the present volume merely confirm the editor’s introductory statement that “Keynes could awaken in his disciples an almost religious fervor for his economics, which could be affectively harnessed for the dissemination of the new economics.” And Professor Harris goes on to say, “Keynes indeed had the Revelation.”
Please read the whole article. The reader can decide for himself whether Mises might have been guilty of some oversimplifications (the article was for the general public, however). In any event, I don’t detect any religiosity in Mises’s article.