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.
Interpretation
Keynes critiques the relevance of long-term economic predictions in the face of immediate challenges.
John Maynard Keynes emphasizes that focusing solely on long-term outcomes of economic policies can be misleading, particularly in times of crisis. He argues that during turbulent periods, the immediate realities and struggles of the present demand attention, as the future is uncertain and can render current concerns trivial if they are ignored.
In practice
During a lecture on economic theories, this quote could highlight the importance of addressing current events.
As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is generally understood. Indeed, the world is ruled by little else.
The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.
We will not have any more crashes in our time.
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.
One of the most powerful insights in economics is this idea of a division of labor. You do the thing you're good at. Other people do something else that they're good at. The net effect is better for everybody.
Money never seems to be interested in strengthening regulatory agencies, for example, but always in subverting them, in making them miss the danger signs in coal mines and in derivatives trading and in deep-sea oil wells.
The real source of market promise is not the wealthy few in the developing world, or even the3 emerging middle-income consumers. It is the billions of aspiring poor who are joining the market economy for the first time.
Reforms aimed at increasing an economy's flexibility are always hard - and even more so at a time of weak growth - because they require eliminating protections for vested interests in the short term for the sake of greater long-term prosperity.
Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow. Flexible and efficient markets for labor and capital, an entrepreneurial tradition, and a general willingness to tolerate and even embrace technological and economic change all contribute to this resiliency.
War can really cause no economic boom, at least not directly, since an increase in wealth never does result from destruction of goods.
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