Quotation of the Day…

by Don Boudreaux on November 15, 2012

in Economics, State of Macro

… is from pages 289-290 of Joseph A. Schumpeter’s posthumous 1951 collection, Ten Great Economists; specifically, it’s from his essay “John Maynard Keynes” (original emphasis; footnote omitted):

Many of the men who entered the field of teaching or research in the twenties and thirties had renounced allegiance to the bourgeois scheme of life, the bourgeois scheme of values.  Many of them sneered at the profit motive and at the element of personal performance in the capitalist process.  But so far as they did not embrace straight socialism, they still had to pay respect to saving – under penalty of losing caste in their own eyes and ranging themselves with what Keynes so tellingly called the economists’ ‘underworld.’  But Keynes broke their fetters: here, at last, was theoretical doctrine that not only obliterated the personal element and was, if not mechanistic itself, at least mechanizable, but also smashed the pillar into dust; a doctrine that may not actually say but can easily be made to say both that ‘who tries to save destroys real capital’ and that via saving, ‘the unequal distribution of income is the ultimate cause of unemployment.’  This is what the Keynesian Revolution amounts to.

In the omitted footnote (which occurs after the penultimate sentence in the above quotation), Schumpeter writes: “And, after all, a glance at pp. 372-3 and 376 of the General Theory will convince anyone that Keynes actually came pretty close to authorizing both statements.”

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