Wednesday, February 18, 2009

Another 'As If' Attribution

Andrew Rosenblum writes: “Two distinguished economists try to revive Keynesianism—true Keynesianism”, in a review of “Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
By George A. Akerlof and Robert J. Shiller, (Princeton University Press) in The New York Observer: HERE:

In their account of the Great Depression, Messrs. Akerlof and Shiller portray Keynes as the true “centrist,” with actual socialists to his left arguing for the government to take over private enterprise and assign jobs to the unemployed. Meanwhile, critics on the right clung to Adam Smith’s hallowed economic model: They insisted that through balanced budgets and limited government regulation—“as if by an invisible hand”—private markets would create a job for any worker willing to get paid less than he produced.”

Another assertion that “as if by an invisible hand” was part of “Adam Smith’s hallowed economic model” – whatever that means – adds ‘as if’ to The Metaphor as if has validity!

Even then, Maynard Keynes was not that ignorant. His assault on ‘classical economics’ was more on his contemporaries, who believed that ‘laissez-faire’ was a judicious policy, and was not an historically accurate attribution to Adam Smith (who never advocated laissez-faire, or mentioned the words).

Not having read George A. Akerlof and Robert J. Shiller’sAnimal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism”, I cannot comment on the validity or veracity of its content. The 'as if' error may well be the reviewer's, Andrew Rosenblum's sole responsibility.



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