More Keynesian than Keynes

CAMBRIDGE – Like most people who create an “ism,” John Maynard Keynes quickly found his followers running ahead of him. “You are more Keynesian than I am,” he once told a young American economist. Now it is the turn of his biographer, Robert Skidelsky, to become distinctly more Keynesian than Keynes.

Keynes was not averse to changing his mind. But, as far I am aware, he did not change his predictions after the fact. This does not seem to be the case for Skidelsky.

In November 2010, Skidelsky described British Chancellor of the Exchequer George Osborne as a “menace to the future of the economy,” whose policies “doomed” the United Kingdom to “years of interminable recession.” In July 2011, he declared that Osborne was making a “wasteland.”

None of this happened; the honest thing to do would be to admit that. But, in pseudo-science, you never acknowledge that a prediction was wrong and thus that the model might be defective. So now Skidelsky retrospectively “predicts” something quite different: “that the start of austerity aborted the recovery in 2010; that recovery would have come sooner if the pre-austerity level of public spending had been maintained; [and] that it was the reduction of austerity in 2012 that enabled the economy to expand again.” With a flourish, he concludes: “The facts are consistent with Keynesian theory. Keynesians said austerity would cut output growth. Output growth fell.”