Tuesday, July 16, 2013

Keynes on the New Deal, as it happened

The NYT has on file a 1934 letter to the editor from JMK, a criticism and appraisal of the New Deal.

It doesn't appear in Skidelsky's biography, or at least I don't remember it. I only found out about it because the "Economix" blog published a Bruce Bartlett editorial on what he dubs "inflation-ophobia."

I'm saving the link here so I can find the Keynes editorial easily for fall's EC 2013 Introduction to Economics class.

Why is this historical letter at all important to a blog about sustainability?

Because climate change policy is intimately entwined with macroeconomics.

You can do the work needed to understand the climate science, the best policies for mitigation, adaptation and resilience, and even get your head around the strange Through the Looking Glass world of carbon sequestration, but if you don't also begin to think about the macro-economics and geopolitics of climate policy, you'll eventually run into trouble.

Trouble of the largest possible kind: global macroeconomic and geopolitical trouble.

(Otherwise known as recession, depression, conflict and war.)

Keynes remains the world's most influential modern macro-economist, despite the rise during the 1980s of the thought of his theoretical nemesis, Hayek. He was the pre-eminent academic economic theorist of the Great Depression and World War II, and his thought shaped our world then and shapes it now.

Ergo, no understanding climate policy without first understanding Keynes.

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