Here’s a letter to the Wall Street Journal:
Clearly exposing the dangers lurking in Treasury Secretary Geithner’s proposal to centrally control trade “imbalances,” John Cochrane notes that “There is at work here a strange marriage of Keynesianism and mercantilism” (“Geithner’s Global Central Planning,” Oct. 26).
Alas, this marriage isn’t so strange. In Chapter 23 of his General Theory, Lord Keynes himself explicitly praised mercantilist thinkers while he criticized classical economists for dismissing, as “a puerile obsession,” mercantilists’ concerns with the balance of payments.
Keynes was in this matter, as in so many others, led to frightfully wrong conclusions by what we might fairly describe as his puerile obsession with aggregate demand.
Sincerely,
Donald J. Boudreaux
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