Daniel Kuehn’s apparent surprise that any serious scholar – for example, Joseph Schumpeter or Thomas McCraw (or any gadfly; for example, Don Boudreaux) – would regard Keynes as a stagnationist got my brain racing. Where, where, where did I long ago first encounter a mainstream economist who identified Keynes as a stagnationist? Fortunately, my mind raced fast enough to remind me of the late Harry Johnson. Johnson was (partly) a Chicagoan, it’s true, but hardly a Hayekian or Austrian, and certainly no ideologue.
So I found my long-neglected 1975 collection of some of Johnson’s best essays, On Economics and Society, and reviewed for the first time in more than 15 years the fascinating readings collected therein. Here’s from Johnson’s 1960 address at the American Economic Association’s annual meeting; the address (published in the May 1961 issue of the AER) is entitled “The General Theory After 25 Years”:
A more relevant question is whether large-scale unemployment is the typical situation of the advanced capitalist economy, as the theme and prevailing tone of the General Theory imply, and as the stagnationists of the 1930s insisted.
By the way, Johnson in a later, a 1973, essay (“Keynes and British Economics”) noted that
the ‘new economics’ won acceptance in the United States only as recently as the tax cut of 1964….