The Economy: We Are All Keynesians Now

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he was a creature of his times, Keynes was primarily interested in pulling a Depression-ridden world up to some form of prosperity and stability; today's economists are more concerned about making an already prospering economy grow still further. As Keynes might have put it: Keynesianism + the theory of growth = The New Economics. Says Gardner Ackley, chairman of the Council of Economic Advisers: "The new economics is based on Keynes. The fiscal revolution stems from him." Adds the University of Chicago's Milton Friedman, the nation's leading conservative economist, who was Presidential Candidate Barry Goldwater's adviser on economics: "We are all Keynesians now."

Within the next two weeks, Ackley and his fellow council members will have to give President Johnson a firm economic forecast for the year ahead and advise him about what policies to follow. Their decisions will be particularly crucial because the U.S. economy is now moving into a new stage. Production is scraping up against the top levels of the nation's capacity, and federal spending and demand are soaring because of the war in Viet Nam. The economists' problem is to draw a fine line between promoting growth and preventing a debilitating inflation. As they search for new ways to accomplish this balance, they will be guided in large part by the Keynes legacy.

That legacy was the product of a man whose personality and ideas still surprise both his critics and his friends. Far from being a socialist left-winger, Keynes (pronounced canes) was a high-caste Establishment leader who disdained what he called "the boorish proletariat" and said: "For better or worse, I am a bourgeois economist." Keynes was suspicious of the power of unions, inveighed against the perils of inflation, praised the virtue of profits. "The engine which drives Enterprise," he wrote, "is not Thrift but Profit." He condemned the Marxists as being "illogical and so dull" and saw himself as a doctor of capitalism, which he was convinced could lead mankind to universal plenty within a century. Communists, Marxists and the British Labor Party's radical fringe damned Keynes because he sought to strengthen a system that they wanted to overthrow.

Truth & Consequences. Keynes was born the year Marx died (1883) and died in the first full year of capitalism's lengthy postwar boom (1946). The son of a noted Cambridge political economist, he whizzed through Eton and Cambridge, then entered the civil service. He got his lowest mark in economics. "The examiners," he later remarked, "presumably knew less than I did." He entered the India Office, soon after became a Cambridge don. Later, he was the British Treasury's representative to the Versailles Conference, and saw that it settled nothing but the inevitability of another disaster. He resigned in protest and wrote a book, The Economic Consequences of the 'Peace, that stirred an international sensation by clearly foretelling the crisis to come.

He went back to teaching at Cambridge, but at the same time operated with skill and dash in business. The National Mutual Life Assurance Society named him its chairman, and whenever he gave his annual reports to stockholders, the London Money Market suspended trading to hear his forecasts for interest rates in the

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