Monday, August 06, 2007

Keynes Against Laissez Faire Before His Revolution

"It is not true that individuals possess a prescriptive 'natural liberty' in their economic activities. There is no 'compact' conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction from the Principles of Economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately." -- John Maynard Keynes (1926). "The End of Laissez-Faire"
I was inspired to contextualize this Keynes quotation, with the post title, by a reaction on Ezra Klein's blog to Dani Rodrik's dualism. (I like the Keynes quotation that Rodrik chooses.) There are other reactions to Rodrik, including by me in comments.

Update: Atrios alludes to the Lipsey and Lancaster (1956-1957) paper; his title is an allusion to a funny Leijonhufvud paper.

Update II: Does Radek describe Econ 101 as a kind of "noble lie"? Anyways he has some links to others discussion Rodrik's post. He doesn't link to Peter Boettke, though.

1 comment:

YouNotSneaky! said...

I don't see where you get that from my comments. Rather, I'm saying that I think following Econ 101 policies will on average work better than regulatin' everything that can get regulated.