Henry Hazlitt did the seemingly impossible, something that was and is a magnificent service to all people everywhere. He wrote a line-by-line commentary and refutation of one of the most destructive, fallacious, and convoluted books of the century. The target here is John Maynard Keynes’s General Theory, the book that appeared in 1936 and swept all before it.
In economic science, Keynes changed everything. He supposedly demonstrated that prices don’t work, that private investment is unstable, that sound money is intolerable, and that government was needed to shore up the system and save it. It was simply astonishing how economists the world over put up with this, but it happened. He converted a whole generation in the late period of the Great Depression. By the 1950s, almost everyone was Keynesian.
But Hazlitt, the nation’s economics teacher, would have none of it. And he did the hard work of actually going through the book to evaluate its logic according to Austrian-style logical reasoning. The result: a 500-page masterpiece of exposition.
Murray Rothbard was blown away. “Keynes’ General Theory is here riddled chapter by chapter, line by line, with due account taken of the latest theoretical developments. The complete refutation of a vast network of fallacy can only be accomplished by someone thoroughly grounded in a sound positive theory. Henry Hazlitt has that groundwork.”
500 page hardbound volume.
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To me, the greatest achievement of Mr. Hazlitt was to read through what is unarguably one of the most unreadable works of recent centuries, and from there, find the time to write a concise (but powerful) refutation – or debunking, as I prefer to call it, for I consider Mr. Keynes to be nothing more than a mountebank and a crank, in the same (dubiously famous) group as Marx & Freud.
The Mises Institute’s re-publishing of Henry Hazlitt’s “The Failure of the ‘New Economics’†is an important achievement. As others much more knowledgeable than myself have noted, Hazlitt systematically exposes fallacy after fallacy in Keynes’s thinking and demolishes the Keynesian system. Anyone who objectively reads Hazlitt’s book can only concluded that Keynesian economics, in all its varieties, is scientifically barren.
Hazlitt’s work should be required reading for every macroeconomics student and any individual who desires to understand economics.
I could kiss you!
Dennis, Hazlitt didnt seem to understand many points made by Keynes and there is a belief that Hazlitt might not have been competent enought to criticize Keynes.
Personally I think that Hayek’s theories about business cycles and capital & investment are better than theories created by Keynes.
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