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Tuesday, July 26, 2011

If I Were Dictator: Lord Keynes Edition

A student once asked economist Gordon Tullock, “if you don’t like democracy what do you want?” to which he responded “Tullock as dictator!” When Ludwig von Mises was asked what he would do if he were king he responded, “abdicate!” Haven’t we all thought about what it was like if we were dictator? Some of us believe ourselves to be above Lord Acton’s warning that absolute power corrupts absolutely, while others may take the same position as Mises. Either way it is an interesting question.

In today’s document, a letter from John Maynard Keynes to Henry Hazlitt dated September 17, 1931, Keynes reluctantly declines Hazlitt’s offer to participate in a series of articles entitled “If I were dictator.” Hazlitt’s project seems to never have come to fruition (though it is possible I was simply unable to find it). Still, what would it have been like with Lord Keynes as dictator? Despite the fact that, at the time of this letter, Keynes had yet to publish his General Theory, a book Hazlitt himself spent much effort attacking, the idea of dictator Keynes would raise many eyebrows.

In spite of the positions Keynes took throughout his career, the widespread view in academia is that Keynes was a model classical liberal, who many profess to be the “savior” of capitalism. Keynes even viewed himself as a defender of a free society. How he differed from most classical liberals was a result of him trying to update the essential liberal principles to the more modern economic conditions.

Still, many may find it difficult to square this with many of his strange beliefs. In 1933 he endorsed, though with reservations, the social “experiments” of the 1930s of Germany, Italy, and Russia. In the introduction to the General Theory he admits his approach to economic policy is better suited to a totalitarian state, such as the one run by the Nazis. He said the Soviet Union was a book “which every serious citizen will do well to look into.” And Keynes’s new economics presented in the General Theory gave the state more control over the economy.

If it were up to me I would certainly not want to see the dictatorship of Lord Keynes. He was far from a “model” classical liberal, in fact he was a statist, a defender of mercantilist ideas, and apparently had a little too much sympathy for some of the 20th centuries most ruthless regimes. Keynes was undoubtedly a brilliant man but in the battle of ideas of the 20th century a true classical liberal would have to say F. A. Hayek was right and Keynes was wrong. Still, it is a shame Keynes had to turn down Hazlitt’s invitation to participate because at the very least what he had to say would have definitely been interesting.

Download the September 17, 1931 Letter from J.M. Keynes to Henry Hazlitt here.

  • Nicholas Snow is a Visiting Assistant Professor at Kenyon College in the Department of Economics, and previously a Senior Lecturer at The Ohio State University Economics Department. His research focuses on the political economy of prohibition.