Wednesday, September 17, 2008

Keynes Should Take a Philosophy Class

Keynes writes like a medical doctor in Essays in Persuasion: he diagnoses economic problems and prescribes solutions to "fix" the economy.  He views the depression like the flu: with proper care, we can get back to our healthy state.  But just as Keynes might be identifying our problems and solutions, he seems to be committing a philosophical error - jumping to conclusions.

Let's examine his most doctorly statement: "We have magneto trouble.  How, then, can we start up again?"  (Page 140).  In this statement, Keynes recognizes that the economy needs a boost just like how a car might need a jumpstart if its battery were dead.  His diagnosis might be correct - the economy might need a jumpstart - but his next statement (how can we start up again?) presupposes that the government is responsible for jumpstarting the economy.

I am not meaning to suggest that the government cannot adequately address the problems Keynes identifies.  Surely, expansionary fiscal policy would do the trick.  But presupposing the government is responsible for "fixing" the economy is too far a conclusion from the premise: "we have magneto trouble."

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