Luigi Zingales on Keynesians

A zinger from Zingales:

Zingales“Keynesianism has conquered the hearts and minds of politicians and ordinary people alike because it provides a theoretical justification for irresponsible behavior. Medical science has established that one or two glasses of wine per day are good for your long-term health, but no doctor would recommend a recovering alcoholic to follow this prescription. Unfortunately, Keynesian economists do exactly this. They tell politicians, who are addicted to spending our money, that government expenditures are good. And they tell consumers, who are affected by severe spending problems, that consuming is good, while saving is bad. In medicine, such behaviour would get you expelled from the medical profession; in economics, it gives you a job in Washington.”

Luigi Zingales, “Keynesian principles: The opposition’s opening remarks.” The Economist, March 10, 2009, paragraph 24.

More Zingales: A Capitalism for the People.

3 thoughts on “Luigi Zingales on Keynesians

  • May 1, 2014 at 9:19 am

    My understanding of Keynesianism is that the government runs deficits during recessions and surpluses during periods of economic growth. Politicians claiming to be Keynesians, however, advocate deficit spending no matter what. It’s another one of the left’s logical contradictions. On the one hand, they take credit for ending the Great Recession and producing economic growth. On the other hand, they clamor for ever greater levels of government spending, which in a Keynesian model implies a contracting economy. The analogy of a doctor recommending wine to an alcoholic is quite appropriate. In this case, the addiction is political power and the drug is the ability to buy votes.

  • May 3, 2014 at 1:44 pm

    Well put Eric. First I’ve heard of Luigi Zingales. Really appreciate the recommendation Prof. Hicks and will buy his book.

    If one sees recessions as corrections then Keynes’ notion of running deficits then is seen as an incredibly wrong-headed approach.

    Here’s one of the best encapsulations of Austrian business cycle theory I’ve come across given by Thomas E. Woods (7:56 min):

  • May 9, 2014 at 12:23 am

    Zingales’ book arrived from Amazon yesterday. When I’ll get to it with a truckload of reading to do is another question. But don’t think I can resist shortlisting it.

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