Keynesianism and Marxism

 
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This is the way the world ends. Not with a bang but a whimper.
I always find it funny how Marxist/Socialists seem enamoured with Keynes. The man was an incredibly ardent supporter of capitalism, to the point of publicly refuting a close friend who claimed he had read Marx and agreeing with the sentiments of Hayek's Road to Serfdom.

Hell, he even said this about Marxism in Russia:

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How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete economic textbook which I know to be not only scientifically erroneous but without interest or application for the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the Red bookshops?

Keynes's description of the Great Depression essentially captured this: "We have magneto trouble". Keynes's view was that the history of capitalism was a history of technical faults to be corrected, not that capitalism was inherently contradictory or had some kind of sociological time-limit.

The fundamental distinction between Keynesianism and Marxism is that Keynesianism is good economics. Marxism just doesn't hold up to scrutiny:
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While radical economics has provided a critique of economic theory, it has been more concerned with presenting a critique of capitalism. It is not just that markets do not provide a constrained Pareto efficient outcome—though that is a welcome first step in the critique—but that capitalism is fundamentally flawed. Mainstream economists have not only found concepts like exploitation and power to be useless in explaining economic phenomena, but they worry about introducing such emotionally charged words into the analysis. But that is presumably precisely why the radical economists choose to use such words: they want the analysis to motivate action. It is in their implicit or explicit policy prescriptions that radical economists fail to make their case. The contention that markets are not constrained Pareto efficient does suggest a role for government, but even that needs to be qualified: the theorems have little to say about whether actual governments can undertake the appropriate roles. Moreover, proving that markets are imperfect does not necessarily imply anything is radically wrong with the capitalist system.

Even when it comes to the more moderate social democrats, the love with Keynes is somewhat misplaced. The creation and development of a welfare state primarily came from Germany under Bismarck, before Keynes was born, and then from Beveridge in Britain. (As an interesting aside, Beveridge actually viewed the welfare state as a potential channel for eugenics, believing people who had to be supported by the State should suffer "complete and permanent loss of all citizen rights – including not only the franchise but civil freedom and fatherhood.").

Keynes's view on a social welfare net is rather, well, non-existent. Keynes didn't believe a social safety net would be necessary, since he viewed the government's role as one of a massive consumer which would push the economy towards full employment whenever it deviated. When it comes to programmes like the New Deal, Keynes was rather critical, believing it to be poorly constructed.

Basically, Keynes was a reactionary, capitalist pig.