We are all Keynesians now

Aftershock: The Next Economy and America's Future
by Robert B. Reich
Published 21 Sep 2010

And it proved that widely shared income gains were not incompatible with economic growth; they were, in fact, essential to it. * In fact, Nixon didn’t actually say this. He said, “I am now a Keynesian in economics.” The famous “We’re all Keynesians now” came from a cover story in the December 31, 1965, edition of Time magazine, which attributed the quote to Milton Friedman. Even this wasn’t precisely accurate. In a commentary appearing in the February 4, 1966, edition of Time, Friedman clarified that he had actually said, “In one sense we are all Keynesians now, in another, nobody any longer is a Keynesian.” 7 How We Got Ourselves into the Same Mess Again As secretary of labor in the 1990s, I traveled a great deal across America.

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By then the middle class—its pockets bulging with pay accumulated during the war that it was not allowed to spend during wartime—had the means to buy, and its pent-up demand for houses, cars, appliances, and almost every bit of baby paraphernalia imaginable created new jobs. And as the economy grew, the debt shrank as a percentage of it. “We’re all Keynesians now,” Richard Nixon purportedly proclaimed in 1971.* By then even a conservative like Nixon had accepted government’s ability to keep people employed, to fill the breach when consumers and businesses did not spend enough. The Great Prosperity also marked the culmination of a reorganization of work that had begun during the Depression.

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

“I recall well the Harvard graduate student who came to visit me, saying something like, ‘I had to see for myself what that black magician from the Middle West was like.’ ”12 Back in 1966, Time magazine had published a cover story marking the arrival of “neo-Keynesianism,” arguing that “because he was a creature of his times, Keynes was primarily interested in pulling a Depression-ridden world up to some form of prosperity and stability; today’s economists are more concerned about making an already prospering economy grow still further,” before quoting Friedman as saying, “We are all Keynesians now.”13 The suggestion that Friedman, the champion of liberal economics, should concede that Keynesianism had triumphed was news. But, as with so much sensational journalism, it proved a story too good to check. Friedman, who had spoken to a Time reporter for the piece, was incensed at being misreported and wrote to the magazine’s editor: You quote me as saying: “We are all Keynesians now.” The quotation is correct, but taken out of context. As best I can recall it, the context was: “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian.”

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And with time, increasingly ungrudging respect.” Now, with Friedman gone, Summers was prepared to go further. “If Keynes was the most influential economist of the first half of the 20th century, Friedman was the most influential of the second half,” he wrote. “Republican Richard Nixon once pointed out that ‘We are all Keynesians now.’ Equally, any honest Democrat will admit that we are all Friedmanites now. We are because he won so many of his arguments with the conventional wisdoms of his time.”18 In a piece in the New York Times, Summers wrote that “as an undergraduate in the early 1970s, I was taught that everyone other than Milton Friedman and a few other dissidents knew that fiscal policy was of primary importance for stabilizing economies, that the Phillips Curve could be exploited to increase employment if only society would tolerate some increase in inflation, and that economists would soon be able to take economic fluctuations through finely calibrated policies.”

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Kennedy, 46 Joint Economic Committee of Congress hearing, 152–56 on labor unions, 47, 110, 153 legacy of, 289–94 on legalizing drugs, 50 on liberal bias in the press, 48–49, 52 libertarianism, 48–49, 69, 73, 86, 138, 217–18, 311 on licensing of doctors, 30, 48, 173, 269, 291 macroeconomics, 95–96, 268 on managing the economy, 95 market-based system supported by, 48, 70, 278 on monetary policy, 70, 106–8, 109, 111, 113, 129–31, 289–90 Mont Pèlerin meetings, 35–37, 82, 309 negative income tax plan, 143, 173, 292 Nixon’s 1968 campaign, 141–42, 157 Nobel Prize for economics, 26, 164–71 opposition to military draft, 49–50, 156, 290–91 opposition to wage and price controls, 150–52, 153–55, 157 outsider status, 74, 76, 132, 138, 174, 291 papers archived at Hoover Institution, 284 PhD thesis, 33 Pinochet and, 160–61, 168, 169, 170 popularity in Soviet bloc, 215, 254 praise for Samuelson, 162–63 price system seen as virtuous, 80 on property rights, 80 and protests at Nobel Prize for, 168, 169 quantity theory of money, 45, 95, 98–100, 101–3, 104–5, 107, 126–27 reaction to Samuelson’s 1995 note, 254 Reagan monetary policy and, 201–2 Reagan’s economic policy meeting and, 200–201 reputation in Britain, 229–30 research on role of money, 34–35, 103–5, 107, 262, 280, 320 response to 9/11 terrorist attacks, 255 return to Chicago, 33, 34 rivalry with Samuelson, 10, 27, 34, 71, 83, 132, 295–96 role of individual self-interest in society, 90, 91 Samuelson friendship with, 9–10, 254 in Samuelson’s Economics, 74, 171–73, 315 school voucher proposal, 50, 197 “shock treatment” in Chile recommended, 160–61, 169, 327 similarities to Samuelson, 11 on socialism, 217, 334 Soviet economy and, 218, 334 stagflation and, 119, 170–71, 207, 289, 322 Statistical Research Group at Columbia, 33 on steady money supply growth, 106, 113, 130–31, 140, 157, 203, 266 study at Columbia University, 28 study at Rutgers University, 26–27 supply-side economics and, 204, 207–8 suspicion of big government, 69 on taxation, 32, 79, 85, 155–56, 208, 290 on tax cuts, 44, 155–56, 208, 209, 211, 252 on taxes in wartime, 32 television series, 197 Thatcher’s election and, 239 “There’s no such thing as a free lunch,” 114, 226, 321 and A Tract by Keynes, 94–96 tributes after death, 265–67, 268–69 on unemployment, 110–11, 304–5 at University of Chicago, 27–29, 70, 82, 99, 254 on velocity of money, 61, 93–94, 106, 109 view of Greenspan, 259–60 visit to Adam Smith’s grave, 43 visit to the Soviet Union, 215, 334 on Volcker’s Fed policies, 193–94, 195–96, 200–201, 202–4, 212, 214 Volcker’s skepticism about monetarism, 178–80, 181–85, 189, 235 “We are all Keynesians now,” 75 on the welfare state, 74, 76, 173, 230 at Wisconsin-Madison University, 31 work for New Deal programs, 29–31, 311 writing style of Newsweek columns, 10, 57–60 see also specific titles Friedman, Rose Director Aaron Director and, 11, 27 at Bureau of Home Economics, 309 in Cambridge, 39–40 death, 269 marriage, 27 on Nobel Prize for economics, 161–62, 164, 165, 166 resentment of Samuelson’s “privilege,” 27–28 Samuelson’s notes and, 254, 265–66 urging Friedman to work for Newsweek, 8–9, 11 visit to Adam Smith’s grave, 43 visit to the Soviet Union, 215, 334 Friedman, Sára Ethel (née Landau), 25–26 Galbraith, John Kenneth Affluent Society, The, 5, 302 birth and death, 302 favorable comments on the Soviet Union, 216, 219 Johnson and, 7 Kennedy and, 5–6, 22 Life in Our Times, A, 224–25 Nixon and, 147 opposition to Vietnam War, 7, 312 price controls demanded, 152 television series, 197 Garvy, George, 94, 319 Gary, Indiana, 11–12 GATT (General Agreement on Tariffs and Trade, 291 General Motors, 146, 153 General Theory of Employment, Interest and Money, The (Keynes) on Great Depression, 106, 288 Hansen’s exposition of, 15 Hayek on, 44, 311 increasing aggregate demand, 204, 235 key elements and questions, 18–19, 60–61 macroeconomics, 101, 133, 302 monetary theory in, 101–2, 135 multiplier, 18, 97 propensity to consume, 19, 100, 133 publication, 8, 39, 55, 98, 133 quantity theory of money, 98 in Samuelson’s Economics, 18–19 Gilmour, Ian, 230, 231, 236, 244–45 Gingrich, Newt, 49, 251–53, 312 Giuliani, Rudolph (Rudy), 49, 312 God and Man at Yale (Buckley), 19, 306, 324 gold reserves, 148, 325–26 gold standard, 108, 112, 142, 185–86 Goldwater, Barry, 51–53, 139–41, 166, 200, 293, 312 Graham, Katharine Meyer, 4–5, 225, 302 Graham, Philip Leslie, 3–4, 5, 301–2 Great Depression causes, 34–35, 44, 47, 82, 103–5, 106, 323 deflation, 107 effects of, 14–15, 26, 30–31, 104 Keynesian economics and, 8, 23, 74–75, 98, 104, 106–7 Roosevelt and, 78, 104 Great Moderation, 271, 278, 282 Greenspan, Alan, 200, 255–56, 259–60, 271, 338 Griffiths, Brian, 246, 337 Guion, Connie, 2 Haberler, Gottfried von, 15, 305 Halberstam, David, 3, 301 Hansen, Alvin, 15, 304, 305 Hansen-Samuelson model, 14, 304 Harberger, Arnold C., 160, 168–69, 327 Harcourt, William, 75, 315 Harriman, Averell, 21, 306 Hayek, Friedrich attempt to join Chicago’s economics department, 37–38, 303 Ayn Rand and, 81 democracy and economics, 66 duel with Keynes in 1931, 9, 38, 53, 69 on failure of monetary theories, 213–14 on Friedman and macroeconomics, 95–96 on Friedman’s positive economics essay, 44 on intervention by government, 65–68, 87, 222 on Keynes’s General Theory, 44, 311 on managing the economy, 95 on measuring money in an economy, 213–14 microeconomics, 76 Mont Pèlerin meetings, 35–37, 82, 309 Nobel Prize for economics, 164, 166 popularity in Soviet bloc, 215 post–World War I experience in Austria, 61–62, 91 rejection of macroeconomics, 76, 95–96 Road to Serfdom, The, 35–36, 66–68, 87, 215, 222, 237, 334 in Samuelson’s Economics, 74, 315 on taxes in wartime, 309 on unemployment, 199 warnings about politicians, 116, 141, 199 see also specific titles Hazlitt, Henry Stuart, 5, 7–8, 302 Healey, Denis, 180–81, 190, 227–29, 230–31, 242, 330 Heath, Edward defeat in 1974 election, 231–32, 233, 235–36 economic policies, 232–33, 235 on monetarism, 233, 236, 239–40, 242, 243 Heller, Walter H., 116, 307, 321 Heller, Walter W., 116, 307, 321 Hicks, John, 41, 101, 343 History of Economic Thought, A (Barber), 73 Hobhouse, Leonard Trelawny, 88–89, 318 Hoff, Trygve, 309 Holmes, Oliver Wendell Jr., 85, 317 Horse Feathers (movie), 48, 311 Hotelling, Harold, 28, 307 Howe, Geoffrey, 239, 242, 243–44, 245, 246, 337 Hughes, Emmet John, 4–5, 302 Humphrey, Hubert, 142 Hutchins, Robert, 33, 34, 309 hyperinflation in Austria after World War I, 62, 91, 122, 322 Friedman on, 151, 170–71, 203 Keynes on, 62 Samuelson on, 121, 152 in U.S. from 1960s onward, 91–92, 115, 120–22, 125 Volcker and, 178, 202 in Weimar Germany, 115, 122, 322 see also inflation income-expenditure model, 19, 99, 319 Income from Independent Professional Practice (Friedman and Kuznets), 33, 308 IndyMac, 272 inflation cost-push inflation, 121, 124, 152 demand-pull inflation, 77, 121–22, 124 Federal Reserve mandate, 109, 178 Friedman explanation of, 74, 77–78, 125, 128, 130–31 Friedman on causes of, 61, 93–94, 115, 126–27, 129–30, 136–37 Friedman solution to, 113, 127–28, 131–32, 151, 197 as hidden tax, 77–78 higher interest rates urged to control, 122, 123, 128, 130 Keynesians on causes of, 118, 137 Keynes on, 62, 129 monetarist explanation of, 74 Nixon and, 145–50 raising taxes to control, 123–24 rates in U.S., 1975–1980, 175, 176 “rational expectations,” 96, 115, 180–81 Samuelson on problem of, 74, 118–22, 123, 176 Samuelson on remedies for, 122–25 sharp rise from 1960s onward, 115, 120–21, 125, 183–84, 186, 188, 192 in the U.K., 227 Vietnam War and, 121, 145 see also hyperinflation; stagflation “Inflation is Caused by Governments” (Joseph), 233 interest rates as cause of Depression, 34–35, 44, 103, 104, 257 discount rate, 104, 186–87, 188, 212, 282 federal funds rate, 181, 186–87, 188, 190, 192, 263 higher rates to control inflation, 122, 123, 128, 130 “natural” and “market” rates of interest, 110–11, 114 prime rate, 187, 194–95 rate cuts during financial freeze, 276 rate cuts to prevent recession, 255–56 risks of artificially low rates, 66, 107–9 and value of money, 45 intervention by government COVID-19 pandemic, 287–89 by Federal Reserve during financial freeze, 273–77 by Federal Reserve to keep dollar steady, 175 Friedman on, 47–48, 87, 222–23, 236, 278 Hayek on, 65–68, 87, 222 Keynes on, 62–65, 68–69 Samuelson on, 65, 87, 88–90 invisible hand, 90, 91, 95 Japan, liquidity crisis in 1990s, 280 Jay, Peter, 228–29, 335 Johnson, Harry, 39, 310, 323 Johnson, Lyndon Baines, 5, 7, 51–53, 139, 140, 145, 302 Joseph, Keith about, 335 Centre for Policy Studies (CPS), 233 monetarism, 233–35, 237–38, 239 sound money policy and, 234, 238 Thatcher introduced to monetarism by, 237–38, 239 on unemployment, 234–35 views on the poor, 236, 336 JPMorgan, 273 Kahn, Richard, 39, 41, 310 Kaldor, Nicholas, 39, 306, 310 Kennedy, John Fitzgerald assassination, 5, 6, 302, 325 Camelot, 5, 22, 119, 302 Friedman on, 46 Galbraith and, 5–6, 22 Samuelson and, 6, 21–24, 120, 138 Kennedy, Joseph, 22 Keynesianism critique of The Road to Serfdom, 8, 68–69, 87 Great Depression and, 8, 23, 74–75, 98, 104, 106–7 macroeconomics, 18 multiplier effect, 14, 18–19, 39, 97, 100, 133 rift between Keynesians and conservatives, 38–40 stagflation and, 118–19, 289 Keynes, John Maynard about, generally, 302 aggregate demand, increasing, 23, 204, 235, 263, 339 Bretton Woods agreement, 40, 68, 142–43, 148, 177, 185, 310 Cambridge Circus, 39–41, 93, 290, 310 on capitalism, 65 on changing his mind, 42 duel with Hayek in 1931, 9, 38, 53, 69 on equilibrium in the economy, 63, 97 failure of free market, 64 fiscal policy and, 19, 106–8 Friedman’s article not published by, 28–29 Hayek challenge of, 9, 303 income-expenditure model, 19, 99, 319 on inflation, 62, 129 on intervention by government, 62–65, 68–69 “In the long run we are all dead,” 63, 96, 136, 324 on laissez-faire system, 63–64, 65 macroeconomics, 75–76, 94, 101, 133, 302 on managing the economy, 95 on monetary policy, 135 on moral values in economics, 69 multiplier, 14, 18–19, 39, 97, 100, 133 on quantity theory of money, 63, 94, 96–97, 98, 106 “rational expectations,” 96 tax cuts recommended by, 23, 204 on taxes in wartime, 32, 309 on unemployment, 15, 64, 234–35 on velocity of money, 63, 94, 97, 98 “You cannot push on a string,” 256, 263, 277, 338 see also specific titles Keynes, John Neville, 43 Kipling, Rudyard, 57, 313 Knight, Frank, 14, 28, 34, 82–83, 99, 304 Krugman, Paul, 285, 322 Kuhn, Thomas S., 94, 319 Kuznets, Simon, 29–30, 33, 71, 308 Laffer, Arthur lack of PhD, 206–7, 332 Laffer Curve and taxes, 205, 206, 208, 209, 332 supply-side economics, 205, 206–7, 250, 332 Lawson, Nigel, 245, 247, 337 Lehman Brothers, 275 Leigh-Pemberton, Robin, 246 Leijonhufvud, Alex, 283, 341 Leontief, Wassily, 15, 16, 29, 305 leveraging by banks, 272 Life in Our Times, A (Galbraith), 224–25 Lippmann, Walter, 4, 283, 302 Lucas, Robert Jr., 82, 283, 287, 317 Luce, Henry, 3 Luria, S.

Crisis Economics: A Crash Course in the Future of Finance
by Nouriel Roubini and Stephen Mihm
Published 10 May 2010

.”: Karl Marx and Friedrich Engels, The Communist Manifesto (New York: Penguin, 2002), 225-26. 47 John Maynard Keynes: Heilbroner, Worldly Philosophers, 248-87; Roncaglia, Wealth of Ideas, 384-88. 47 no ordinary economist: Heilbroner and Thurow, Economics Explained, 38-39. 47 “I believe myself to be writing . . .”: Keynes quoted in Hyman P. Minsky, John Maynard Keynes (New York: Columbia University Press, 1975), 3. 48 “paradox of thrift”: Keynes, General Theory, 84. 48 “animal spirits”: Ibid., 162. 49 “We Are All Keynesians Now”: “The Economy: We Are All Keynesians Now,” Time, December 31, 1965. 49 Friedman and his coauthor: Milton Friedman and Anna J. Schwartz, A Monetary History of the United States, 1867-1960 (Princeton, N.J.: Princeton University Press, 1963), 299-419. 49 most notably Peter Temin: Peter Temin, Did Monetary Forces Cause the Great Depression?

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The most enthusiastic and optimistic adopters believed they could use Keynes’s ideas to maintain something approximating “full employment.” An intervention that had originally been proposed as an emergency measure to forestall a full-blown depression became instead a means of keeping a nation’s economy on an even keel. In 1965 a Time cover story hailed Keynes as a visionary. The title of the story was a quotation—“We Are All Keynesians Now”—that captured the era’s mood. In a bit of wicked irony, the person who uttered those words was the conservative economist Milton Friedman. Friedman later disavowed his comment, and with good reason: he was the father of the monetarist school of economics, which argues that instability within any given economy can be explained by fluctuations in the money supply.

The Theory That Would Not Die: How Bayes' Rule Cracked the Enigma Code, Hunted Down Russian Submarines, and Emerged Triumphant From Two Centuries of Controversy
by Sharon Bertsch McGrayne
Published 16 May 2011

Unwin invented a personal “faith-belief factor” of 28% to boost the 67% “Bayesian probability” that God exists to 95%, and his book hit the bestseller list. A fashionable expression, “We’re all Bayesians now,” plays on comments made years ago by Milton Friedman and President Richard Nixon that “We’re all Keynesians now.” And the CIA agent in a Robert Ludlum thriller tells the hero, “Lucky? Obviously you haven’t heard anything I’ve said. It was a matter of applying Bayes’ Theorem to estimate the conditional probabilities. Giving due weight to the prior probabilities and . . .”1 It must be conceded that not everyone shares this enthusiasm.

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The phrase “We’re all Bayesians now” is sometimes attributed to John Maynard Keynes, but it may have first appeared in 1976 in John C. Henretta and Richard T. Campbell’s article, Status Attainment and Status Maintenance: A Study of Stratification in Old Age in American Sociological Review (41) 981–92. To complicate matters, Campbell was paraphrasing an earlier popular expression, “We’re all Keynesians now,” which has been attributed to Milton Friedman in 1966 and which was “popularized” by President Richard Nixon in 1971. I am indebted to Stephen Senn, Michael Campbell, and Wikipedia for helping sort out the origins of the “Keynesians” quotation. 2. Dawid in Swinburne (2002) 84 3.

End the Fed
by Ron Paul
Published 5 Feb 2011

Silver dollars at the time were still being used in casino slot machines. Wouldn’t that be fascinating, to watch and listen to real silver dollars being used? Credit cards, dollar bills, and tokens—how boring! And I don’t even gamble. The monetary event that prompted me to enter politics occurred on August 15, 1971. That Sunday evening, Richard “We are all Keynesians now” Nixon announced the U.S. government would default on its pledge to deliver gold to any foreign government holding U.S. dollars at the rate of one ounce of gold for each $35. In addition, wage and price controls were put in place, along with a 10 percent import tariff. Instead of the markets collapsing, as I thought they should, the move was immediately praised by the Chamber of Commerce, and the stock market soared.

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era
by Gary Gerstle
Published 14 Oct 2022

Early in Eisenhower’s presidency, Hazlitt sounded an alarm, calling Ike’s policies a “semi–New Deal.”67 Soon after, he declared, with deepening dismay, “that the President had accepted the heart of the Keynesian and New Deal philosophies.”68 After a dissection of Eisenhower’s fiscal and monetary policies that revealed how much the president was following Keynesian prescriptions, Hazlitt lamented, “We are all Keynesians now.”69 Milton Friedman, who, in the 1960s and 1970s would lead the ideological assault on the New Deal order, is thought to have been the originator of this lament in a December 1965 column for Time, then Newsweek’s arch-rival in the newsmagazine business. But Hazlitt beat Friedman to it by a decade, and he made his point about the dominance of Keynesian thinking not in reference to the Democratic politics of the 1960s (as Friedman did) but in reference to the Republican politics of the 1950s.70 As Hazlitt’s commentary about the hegemonic character of Keynesian economics reveals, even in the 1950s under a Republican president, critics of the New Deal order had precious little political space in which to operate.

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Buckley Jr. and The Rise of American Conservatism (New York: Bloomsbury Press, 2011). 66.On Reagan, see Chapters 3 and 4 of this book. 67.Henry Hazlitt, “Ike’s Semi New Deal,” Newsweek, February 15, 1954, in Henry Hazlitt, Business Tides: The Newsweek Era of Henry Hazlitt, (Auburn, AL: Ludwig von Mises Institute, 2011), 343–344. 68.Henry Hazlitt, “Still More Inflation?,” Newsweek, March 8, 1954, in Hazlitt, Business Tides, 346. 69.Henry Hazlitt, “The Policy Is Inflation,” Newsweek, July 5, 1954, in Hazlitt, Business Tides, 352–353. 70.On Milton Friedman’s use of the term, see his “The Economy: We Are All Keynesians Now,” Time, December 31, 1965, http://content.time.com/time/subscriber/article/0,33009,842353,00.html, accessed July 10, 2019. Nixon would himself run with this phrase in 1968 and beyond. See Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of a Neoliberal Politics (Princeton, NJ: Princeton University Press, 2014), 221.

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism
by Leigh Phillips and Michal Rozworski
Published 5 Mar 2019

The argument against planning clearly hinges on Hayek’s ideological commitments Oddly enough, despite challenging the market socialists head on, Hayek’s ideas were initially ignored, perhaps because they were critical not only of left-wing, but also mainstream economic opinion. At a time when even Richard Nixon was pronouncing that “we are all Keynesians now,” how could their maximalist rhetoric be anything but out of step? The debate on the calculation problem continued to unfold in the pages of obscure economic journals. The world, however, had moved on. But shortly after Nixon’s startling declaration of allegiance, the existing economic orthodoxies on both sides of the Berlin Wall were violently thrown into question.

End This Depression Now!
by Paul Krugman
Published 30 Apr 2012

The same can be said of some leading macroeconomists, who similarly spent decades pushing a view of how the economy works that has been utterly refuted by recent events, and have similarly been unwilling to admit their misjudgment. But that’s not all: in defending their mistakes, they have also played a significant role in undermining an effective response to the depression we’re in. Whispers and Giggles In 1965 Time magazine quoted none other than Milton Friedman as declaring that “we are all Keynesians now.” Friedman tried to walk the quotation back a bit, but it was true: although Friedman was the champion of a doctrine known as monetarism that was sold as an alternative to Keynes, it wasn’t really all that different in its conceptual foundations. Indeed, when Friedman published a paper in 1970 titled “A Theoretical Framework for Monetary Analysis,” many economists were shocked by just how similar it looked to textbook Keynesian theory.

The Age of Illusions: How America Squandered Its Cold War Victory
by Andrew J. Bacevich
Published 7 Jan 2020

Among his administration’s major initiatives were: ending military conscription in favor of a so-called all-volunteer force; creating the Environmental Protection Agency and the Occupational Safety and Health Administration; signing into law the Clean Air and Endangered Species Acts; launching the “war on cancer”; embracing “affirmative action” to promote equal employment opportunity; imposing wage and price controls in an effort to curb inflation; abandoning the gold standard; expanding social security; and increasing federal expenditures on Medicare, Medicaid, and food stamps.8 Although Nixon may have been a Republican, he routinely defied conservative orthodoxy, going so far at one point as to assert that “we are all Keynesians now.”9 Not every program Nixon initiated achieved its intended (or at least advertised) purpose. Yet as had been the case with FDR, Nixonian reformism precluded more radical alternatives and thereby served essentially conservative ends. By August 1974, when he left office in disgrace, he had succeeded in deflecting the most prominent threats to the postwar bargain.

Financial Market Meltdown: Everything You Need to Know to Understand and Survive the Global Credit Crisis
by Kevin Mellyn
Published 30 Sep 2009

Richard Nixon won power in 1968 and maintained high levels The Natural History of Financial Folly of spending on domestic programs and the Vietnam War. U.K. conservatives like Ted Heath were as addicted to spending as Labour Party governments. In 1971, Richard Nixon famously declared: ‘‘We are all Keynesians now.’’ THE LAST NAIL IN GOLD’S COFFIN It was Nixon who dispensed with the last constraints of the old financial order. In 1971, the level and trend of inflation (which is to say, erosion of the real value of the dollar) had reached the point where the United States was experiencing a classic gold drain.

The Making of Global Capitalism
by Leo Panitch and Sam Gindin
Published 8 Oct 2012

The Bretton Woods fixed exchange rate system finally had to be abandoned because it became more and more of a drag on the American state’s capacity to navigate between its domestic and imperial responsibilities. 6 Structural Power Through Crisis There was no little irony in Richard Nixon’s intoning, in 1971, of the phrase Milton Friedman had coined in 1965—“We are all Keynesians now”—just as the crisis of Keynesianism was becoming most visible.1 By the early 1970s the contradictions that the successes of the 1960s had produced came to a head. In the midst of a crisis of corporate profitability and financial instability, the simultaneous rise of both inflation and unemployment (“stagflation”) confounded any consistent application of fiscal and monetary policy not only in the US, but in all the advanced capitalist states.

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Cooper and Jane Sneddon Little, “US Monetary Policy in an Integrating World: 1960 to 2000,” New England Economic Review 3 (2001), p. 86. 59 Quoted in Hawley, Dollars and Borders, p. 97. 60 See Aaron Major, “The Fall and Rise of Financial Capital,” Review of International Political Economy 15: 5 (December 2008). 61 Hawley, Dollars and Borders, pp. 112, 119–20. 62 Joanne Gowa, Closing the Gold Window: Domestic Politics and the End of Bretton Woods, Ithaca: Cornell University Press, 1983, p. 99. 63 These are the words of a Federal Reserve official interviewed in Gowa, Closing the Gold Window, p. 145. 64 Ibid., pp. 63, 129. See also Volcker and Gyohten, Changing Fortunes, pp. 61–8. 6. Structural Power through Crisis 1 Friedman actually said, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian.” In a letter correcting the misquote, Friedman added that “the second part is at least as important as the first.” Time, February 4, 1966. 2 See especially James O’Connor, The Fiscal Crisis of the State, New York: St. Martin’s Press, 1973. 3 Robert Skidelsky, “Keynes,” in D.

A Brief History of Neoliberalism
by David Harvey
Published 2 Jan 1995

The left assembled considerable popular power behind such programmes, coming close to power in Italy and actually acquiring state power in Portugal, France, Spain, and Britain, while retaining power in Scandinavia. Even in the United States, a Congress controlled by the Democratic Party legislated a huge wave of regulatory reform in the early 1970s (signed into law by Richard Nixon, a Republican president, who in the process even went so far as to remark that ‘we are all Keynesians now’), governing everything from environmental protection to occupational safety and health, civil rights, and consumer protection.12 But the left failed to go much beyond traditional social democratic and corporatist solutions and these had by the mid-1970s proven inconsistent with the requirements of capital accumulation.

Losing Control: The Emerging Threats to Western Prosperity
by Stephen D. King
Published 14 Jun 2010

While the desire to control inflation is now a central tenet of monetary policy, the shift during the 1970s towards a focus on inflation rather than unemployment as the main macroeconomic policy objective represented a remarkable change of view compared with the 1960s, when most policymakers believed in the pursuit of full employment and didn’t worry too much about inflation. The best economic ideas tend, eventually, to go out of fashion, upstaged by unexpected or irregular economic developments. The shift in stance is summed up nicely in two well-known quotes. The first, ‘we are all Keynesians now’, is commonly attributed to US President Richard Nixon in 1971, although the original source was a tongue-in-cheek Milton Friedman in a 1965 edition of Time magazine, lamenting the dominance at the time of the intellectual ideas stemming from John Maynard Keynes’s General Theory of Employment, Interest and Money.2 The conventional wisdom held that Keynesian demand-management policies – changes in tax and public-spending levels to foster a desired level of economic activity – would bring about full employment.

How Did We Get Into This Mess?: Politics, Equality, Nature
by George Monbiot
Published 14 Apr 2016

Given that the crises I have listed are predictable effects of the dismantling of public services and the deregulation of business and financial markets, given that it damages the interests of nearly everyone, how has neoliberalism come to dominate public life? Richard Nixon was once forced to concede that ‘we are all Keynesians now’: even the Republicans supported the interventionist doctrines of John Maynard Keynes. But we are all neoliberals now. Mrs Thatcher kept telling us that ‘there is no alternative’, and by implementing her programmes, Clinton, Blair, Brown and the other leaders of what were once progressive parties appear to prove her right.

The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality
by Bhaskar Sunkara
Published 1 Feb 2019

Commentators including Paul Krugman and Joseph Stiglitz demanded a historic federal stimulus to revive the economy, and people across the political spectrum welcomed the return of Keynesian economics to the national stage. Time featured a picture of the new president dressed like FDR on its cover and updated its 1965 article “We Are All Keynesians Now” with a celebration of “The Comeback Keynes.” Even the far left Socialist Worker took a moment to appreciate the novelty: business elites, the Democratic Party, and a popular groundswell had come together to support Obama’s proposed stimulus package, signaling “a final end to the conservative dominance that goes back more than a generation.”

Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown
by Detlev S. Schlichter
Published 21 Sep 2011

Deficit spending and money injections are simply what one does in recessions. Intellectually, the two schools are very similar too. Both are part of the twentieth century’s trend toward methodological collectivism and macroeconomics just described. Milton Friedman himself clearly perceived their common methodological foundation when he said that “in one sense, we are all Keynesians now; in another, no one is a Keynesian any longer. . . . We all use the Keynesian language and apparatus; none of us any longer accepts the initial Keynesian conclusions.”8 Furthermore, he declared: “I believe that Keynes’ theory is the right kind of theory in its simplicity, its concentration on a few magnitudes, its potential fruitfulness.

Inventing the Future: Postcapitalism and a World Without Work
by Nick Srnicek and Alex Williams
Published 1 Oct 2015

Instead we are left with actions that sometimes succeed but which rarely have an overarching eye to how this contributes to medium-and long-term goals.105 In the next chapter, we look at how the right undertook such strategic reflection and orchestrated a situation in which neoliberalism became the dominant common sense of our time. Chapter 3 Why Are They Winning? The Making of Neoliberal Hegemony We are all Keynesians now. Milton Friedman If our era is dominated by one hegemonic ideology, it is that of neoliberalism. It is widely assumed that the most effective away to produce and distribute goods and services is by allowing instrumentally rational individuals to exchange via the market. State regulations and national industries are, by contrast, seen as distortions and inefficiencies holding back the productive dynamics inherent to free markets.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

In America the Employment Act of 1946 made the maintenance of full employment a federal responsibility. Keynesian principles regarding the role of fiscal and monetary policy in fighting recessions became fully incorporated into the thinking of economists and politicians, of academics, and of some of the general public. Even the late Milton Friedman has been quoted as saying “We are all Keynesians now”—although he later disavowed his statement.4 And Keynesian macroeconomic policies have largely worked. Yes, there have been ups and downs. Yes, there have been some major upheavals, such as Japan in the 1990s, Indonesia after 1998, and Argentina after 2001. But a bird’s-eye view of the world economy suggests that the entire postwar period has been, and continues to be, a success.

Basic Economics
by Thomas Sowell
Published 1 Jan 2000

When John Maynard Keynes’ picture appeared on the cover of the December 31, 1965 issue of Time magazine, it was the first time that someone no longer living was honored in this way. There was also an accompanying story inside the magazine: Time quoted Milton Friedman, our leading non-Keynesian economist, as saying, “We are all Keynesians now.” What Friedman had actually said was: “We are all Keynesians now and nobody is any longer a Keynesian,” meaning that while everyone had absorbed some substantial part of what Keynes taught no one any longer believed it all.{1013} While it is tempting to think of the history of economics as the history of a succession of great thinkers who advanced the quantity and quality of analysis in this field, seldom did these pioneers create perfected analyses.

The Bitcoin Standard: The Decentralized Alternative to Central Banking
by Saifedean Ammous
Published 23 Mar 2018

But this has in fact happened many times, most notably in the United States in the 1970s, when, in spite of the assurances of Keynesian economists to the contrary, and in spite of the entire U.S. establishment, from President Nixon down to “free market economist” Milton Friedman, adopting the refrain, “We're all Keynesians now” as the government took it upon itself to eliminate unemployment with increased inflation, unemployment kept on rising as inflation soared, destroying the theory that there is a trade‐off between these two. In any sane society, Keynes's ideas should have been removed from the economics textbooks and confined to the realm of academic comedy, but in a society where government controls academia to a very large degree, the textbooks continued to preach the Keynesian mantra that justified ever more money printing.

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis
by James Rickards
Published 15 Nov 2016

In Friedman’s brave new monetary world, eliminating gold and fixed exchange rates enabled enlightened central bankers to carefully calibrate money supply to target maximum real growth consistent with low inflation. In 1971, Richard Nixon said, “I am now a Keynesian in economics,” a variation on Friedman’s more famous phrase, “We are all Keynesians now.” Nixon could as well have said, “We are all Friedmanites now.” Keynes’s impact on fiscal policy, and Friedman’s on monetary policy, became a font of hubris in economics. There was no developed country macroeconomic problem that could not be solved with the right application of spending and money printing.

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future
by Paul Krugman
Published 28 Jan 2020

The neoclassical revival was initially led by Milton Friedman of the University of Chicago, who asserted as early as 1953 that neoclassical economics works well enough as a description of the way the economy actually functions to be “both extremely fruitful and deserving of much confidence.” But what about depressions? Friedman’s counterattack against Keynes began with the doctrine known as monetarism. Monetarists didn’t disagree in principle with the idea that a market economy needs deliberate stabilization. “We are all Keynesians now,” Friedman once said, although he later claimed he was quoted out of context. Monetarists asserted, however, that a very limited, circumscribed form of government intervention—namely, instructing central banks to keep the nation’s money supply, the sum of cash in circulation and bank deposits, growing on a steady path—is all that’s required to prevent depressions.

It's Better Than It Looks: Reasons for Optimism in an Age of Fear
by Gregg Easterbrook
Published 20 Feb 2018

The government debt spree that began early in the twenty-first century may have some relationship to slower economic growth, though nothing happened in terms of standard fears about public debt—no sudden inflation, no refusal of creditors to lend anew. This seems to have convinced the US Congress, and many European parliaments that the old rules don’t apply anymore, and that borrow-and-spend can go on ad infinitum. The saying “we’re all Keynesians now” once was meant to justify government borrowing to smooth out business cycles by firing up demand. But John Maynard Keynes’s dictum had two parts: government should borrow and spend when the economy is slack, then in good times, cut spending to repay debt. Today Western and Asian governments are enthusiastic about the first half of the dictum, which rationalizes giveaways to appease interest groups, but ignore the second half, which demands self-discipline.

The Establishment: And How They Get Away With It
by Owen Jones
Published 3 Sep 2014

They, too, wished to overturn the US’s own political consensus – in their case, to challenge a framework established by the interventionist New Deal economics of Franklin Roosevelt in the 1930s, and then Johnson’s Great Society programmes in the 1960s. As the Tories had accepted the essentials of Clement Attlee’s welfare capitalism, much of the Republican Party also resigned themselves to the US political consensus of the time: President Richard Nixon had even declared in 1971 that ‘We are all Keynesians now.’3 The Heritage Foundation – a much better resourced equivalent of the Adam Smith Institute – was founded in 1973 to promote free-market economics. It enjoyed huge support from corporate and private interests. Following an initial grant of $250,000 from the brewing magnate Joseph Coors, it had an annual budget of $2 million by 1977, reaching $17.5 million by 1989.

Hedgehogging
by Barton Biggs
Published 3 Jan 2005

Keynes’s legacy lives on.The second generation of Keynesian economists who came into positions of influence in both government and international institutions, with the election of President John Kennedy, ran the world economies for many years. Keynes’s prescriptions for diseased economies became the medicine of choice, and their dominance was capped by Milton Friedman’s famous assertion in 1965 that “we are all Keynesians now.” ccc_biggs_ch21_285-304.qxd 11/29/05 7:19 AM Page 303 John Maynard Keynes 303 John Maynard Keynes died of cancer in 1946. He was only 63 years old. Lydia, his lover, confidante, and sometimes nurse for the last 25 years of his life, lived another 30 years.Without the intellectual stimulation of Keynes, her vitality faded.

Keynes Hayek: The Clash That Defined Modern Economics
by Nicholas Wapshott
Published 10 Oct 2011

As his biographer Robert Skidelsky explained, “Hayek was defeated by Keynes in the economic debates of the 1930s, not, I think, because Keynes ‘proved’ his point, but because, once the world economy had collapsed, no one was very interested in the question of what exactly had caused it.”1 Although Keynesianism has been declared dead a number of times since the mid-1970s, Friedman’s acknowledgment in 1966 that “in one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian”2 is a more accurate, if teasingly ambiguous, assessment of the state of economics in the early twenty-first century. One key difference between the two men, whether an economy is best understood from the top down or the bottom up, through macroeconomics or microeconomics, left Keynes in the ascendant.

Evil Geniuses: The Unmaking of America: A Recent History
by Kurt Andersen
Published 14 Sep 2020

As the compensation of CEOs at big companies increased crazily during the 1990s, the president initially thought the government might discourage it with stiff penalties, but the Business Roundtable talked sense into him. And so on. As Nixon had admitted, thirty-odd years after the New Deal, We’re all Keynesians now, thirty-odd years after that, when Clinton took office, he was saying, None of us are New Dealers anymore. It’s worth comparing the New Democrat positioning to that of one older Washington Democrat, whose take was ridiculed as old-fashioned and out of touch. In the 1960s and ’70s, Daniel Moynihan had been pigeonholed as a moderate or a conservative, but as a U.S. senator during the 1990s, when the rest of his party went Republicanesque on the political economy, Moynihan was a kind of heroic last left-winger standing.*1 At the start of his presidency, Clinton tried to legislate an expansion of the private U.S. health insurance system to make it cover more people.

The-General-Theory-of-Employment-Interest-and-Money
by John Maynard Keynes
Published 13 Jul 2018

First is the book’s message—something that ought to be clear from the book itself, but which has often been obscured by those who project their fears or hopes on to Keynes. Second is the question of how Keynes did it: why did he succeed, where others had failed, in convincing the world to accept economic heresy? Third is the question of how much of The General Theory remains in today’s macroeconomics: are we all Keynesians now, or have we either superseded Keynes’s legacy, or, some say, betrayed it? Fourth is the question of how Keynes has held up in the crisis and aftermath. Fifth is the question of what Keynes missed, and why. Finally, I will discuss how Keynes changed economics, and the world. The Message of Keynes It is probably safe to assert that many of those who denounce Keynes— and even some of who claim to support his ideas—have never read his work.

Fantasyland: How America Went Haywire: A 500-Year History
by Kurt Andersen
Published 4 Sep 2017

At the same time, the reality-based left more or less won: the retreat from Vietnam, the passage of civil rights and environmental protection laws, increasing legal and cultural equality for women, legalized abortion. Two leaders of the right, Milton Friedman and Richard Nixon, famously said at the time, “We are all Keynesians now”—meaning that, yes, the government does need to use taxes and spending to manage the economy. But then the right wanted its turn to win: it more or less accepted racial and gender legal equality and learned to live with social welfare and regulation and bigger government, but it insisted on slowing it all down.

A Generation of Sociopaths: How the Baby Boomers Betrayed America
by Bruce Cannon Gibney
Published 7 Mar 2017

The traditional response would have been to cool demand through some combination of lower spending and higher taxes. However, the economy had dipped very slightly, and Nixon wanted strong growth ahead of the 1972 election. Though nominally a conservative Republican, Nixon embraced Keynesian mechanisms (even if he never quite said, “We are all Keynesians now”). The president cajoled the Federal Reserve and Congress and ordered agencies under his control to spend as much as they could, a mandate the Defense Department fulfilled by buying a two-year supply of toilet paper.16 Grow the economy did, at the price of further inflation. It’s not clear the economy needed much stimulating in the first place, any more than Nixon needed Watergate shenanigans to secure his 1972 landslide, but Nixon liked overkill.

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum
Published 4 Sep 2019

“But it is also clear that this promise will not be fulfilled unless we couple with improved techniques of economic management a determination to convert good economics and a great prosperity into a good life and a great society.” 40. Lyndon B. Johnson, The Vantage Point (New York: Holt, Rinehart and Winston, 1971), 74. 41. “We Are All Keynesians Now,” Time, December 31, 1965. Paul Volcker later told the British journalist Stephen Fay, “It is almost impossible to reconstruct the mood, but there was a feeling of exuberance in the economics profession, because it really thought it had the business of the cycle of boom-and-bust licked”: see William Greider, Secrets of the Temple (New York: Simon and Schuster, 1987), 332.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?
by Brett Christophers
Published 17 Nov 2020

The rich whom we cannot afford, as identified by Andrew Sayer in Why We Can’t Afford the Rich (2015), are the rentier rich.2 It is rentiers who, in Guy Standing’s 2016 account, are responsible for the ‘corruption of capitalism’.3 And it is rentiers doing the ‘taking’ rather than the ‘making’ in Mariana Mazzucato’s The Value of Everything: Making and Taking in the Global Economy (2018).4 So ubiquitously do the figures of rent and the rentier seem now to loom that, in 2016, Philippe Askenazy, shadowing William Harcourt in the nineteenth century (‘We are all socialists now’) and Milton Friedman in the twentieth (‘We are all Keynesians now’), submitted that, with the twenty-first century less than two decades old, we were now all rentiers.5 Even the premier magazine and premier newspaper of global capitalism, the Economist and the Financial Times respectively, have been writing about rentierism – with, it must be said, barely more fondness than the illustrious scholars mentioned above.6 One of the main problems one confronts when trying to get a handle on this post-Piketty burst of writing on the rentier, however, is that definitions and conceptualizations vary.

Fantasyland
by Kurt Andersen
Published 5 Sep 2017

At the same time, the reality-based left more or less won: the retreat from Vietnam, the passage of civil rights and environmental protection laws, increasing legal and cultural equality for women, legalized abortion. Two leaders of the right, Milton Friedman and Richard Nixon, famously said at the time, “We are all Keynesians now”—meaning that, yes, the government does need to use taxes and spending to manage the economy. But then the right wanted its turn to win: it more or less accepted racial and gender legal equality and learned to live with social welfare and regulation and bigger government, but it insisted on slowing it all down.

This Changes Everything: Capitalism vs. The Climate
by Naomi Klein
Published 15 Sep 2014

What stopped him was the invisible confinement of a powerful ideology that had convinced him—as it has convinced virtually all of his political counterparts—that there is something wrong with telling large corporations how to run their businesses even when they are running them into the ground, and that there is something sinister, indeed vaguely communist, about having a plan to build the kind of economy we need, even in the face of an existential crisis. This is, of course, yet another legacy bequeathed to us by the free market counterrevolution. As recently as the early 1970s, a Republican president—Richard Nixon—was willing to impose wage and price controls to rescue the U.S. economy from crisis, popularizing the notion that “We are all Keynesians now.”8 But by the 1980s, the battle of ideas waged out of the same Washington think tanks that now deny climate change had successfully managed to equate the very idea of industrial planning with Stalin’s five-year plans. Real capitalists don’t plan, these ideological warriors insisted—they unleash the power of the profit motive and let the market, in its infinite wisdom, create the best possible society for all.

The Age of Turbulence: Adventures in a New World (Hardback) - Common
by Alan Greenspan
Published 14 Jun 2007

It said that economic policymakers should no longer just respond passively to events but should "foresee and shape future developments." The stock market boomed, and at the end of the year Time magazine put John Maynard Keynes on the cover (even though he'd been dead since 1946), declaring, "We are all Keynesians now."* I could scarcely believe it. I'd never been confident in making macroeconomic forecasts, and while Townsend-Greenspan did provide them to clients, they weren't central to our business. I had to admire what Heller had pulled off. But I also remember sitting in my office at 80 Pine Street with its view of the Brooklyn Bridge and thinking, Boy, I'm glad I don't have Walter Heller's job.

The Man Who Knew: The Life and Times of Alan Greenspan
by Sebastian Mallaby
Published 10 Oct 2016

In a memo to Simon on the day of the State of the Union address, Greenspan explained that more government borrowing would not drive up prices so long as it happened soon, while private borrowing was in the ditch, along with the economy. “The problem will come in 1976 or after the economy has strengthened,” Greenspan pleaded.49 “We are all Keynesians now,” he might as well have told him. Greenspan reassured himself that he was making the world better. He had succeeded in improving the design of the rebate, insisting that it had to get to people before the economy recovered unassisted.50 Besides, he and the president were steering a difficult course.