Thus, the weight of my criticism is directed against the inadequacy of the theoretical foundations of the laissez-faire doctrine upon which I was brought up and for many years I taught
Interpretation
Keynes critiques the flaws in laissez-faire economic theory based on his experiences as a teacher and student.
In this quote, John Maynard Keynes expresses his critique of the laissez-faire economic doctrine, which emphasizes minimal government intervention in the economy. He reflects on the limitations of the theoretical foundations of this doctrine, suggesting that it is inadequate for addressing the complexities of economic realities. His experience as both a student and a teacher of this doctrine prompts him to question its validity, which ultimately contributed to his development of new economic theories.
In practice
During a lecture on economic theory, one might quote Keynes to emphasize the need for critical evaluation of existing doctrines.
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.
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.
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.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
The most important single central fact about a free market is that no exchange takes place unless both parties benefit.
After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.
Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States. But we need such skills in order to staff our productive economy, so that the standard of living for Americans as a whole can grow.
Having a decent share of the national wealth for the middle class is not bad for growth. It is actually useful both for equity and efficiency reasons.
We plutocrats need to get this trickle-down economics thing behind us: this idea that the better we do, the better everyone else will do. It's not true. How could it be? I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff, do I?
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