Niall Ferguson is a jerk, and has no idea what he’s talking about (Childless Edition)
Harvard economist Niall Ferguson got such blowback from his stupid suggestion that Keynesian policy recommendations and “In the long run we are all dead” were based on Keynes’ bisexuality and not having children. He’s already apologized. (Shorter Niall Ferguson: You’re right, I am an ass-hat.)
But what is really galling is that people are mangling the meaning of “In the long run we are all dead” as being a call to engage in short-term focused economic policy no matter its long term impact. Another economist, Greg Mankiew, whose intro macroeconomics textbook you probably read if you took Econ 101 in college, made a similar mistake in 2008 (ht @ObsoleteDogma). Mankiew wrote:
Keynesian economists often dismiss these long-run concerns when the economy has short-run problems. “In the long run we are all dead,” Keynes famously quipped.
The longer-term problem we now face, however, may be more serious than any that Keynes ever envisioned. Passing a larger national debt to the next generation may look attractive to those without children. (Keynes himself was childless.) But the rest of us cannot feel much comfort knowing that, in the long run, when we are dead, our children and grandchildren will be dealing with our fiscal legacy.
Now, a lay-person could be excused for only knowing the part about being dead in the long run without knowing the context. However, when you write one of the most taught macroeconomics textbook, you have no excuse not to pretend you haven’t read the paragraph the quote came from!
Paul Krugman quoted it, so I don’t have to go pull out one of my two copies of the General Theory and find it. Keynes wrote:
But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
I’m going to let Paul explain why Greg and Niall should both be apologizing for being wrong on economics, not just being jerks about Keynes’ personal life:
Keynes’s point here is that economic models are incomplete, suspect, and not much use if they can’t explain what happens year to year, but can only tell you where things will supposedly end up after a lot of time has passed. It’s an appeal for better analysis, not for ignoring the future; and anyone who tries to make it into some kind of moral indictment of Keynesian thought has forfeited any right to be taken seriously.
So, let’s move the discussion of what’s gotten to Niall today and Greg in 2008 about Keynes’ personal life and just remember that they have each advocated in greater or less form the austerity policies that have completely and utterly failed. So maybe we should stop listening to them now that their austerity gospel (Reinhart & Rogoff) has been shown to be based on flawed Excel and flawed analysis.