Bastiat: In Favor of Counter-Cyclical Public Spending
Daniel Kuehn draws our attention to this passage, sorely neglected in modern, popular articles claiming that Keynes is a blithering idiot who didn't get Bastiat:
"As a temporary measure in a time of crisis, during a severe winter, this [spending on public works] on the part of the taxpayer could have good effects. It acts in the same way as insurance. It adds nothing to the number of jobs nor to total wages, but it takes labor and wages from ordinary times and doles them out, at a loss it is true, in difficult times."
"As a temporary measure in a time of crisis, during a severe winter, this [spending on public works] on the part of the taxpayer could have good effects. It acts in the same way as insurance. It adds nothing to the number of jobs nor to total wages, but it takes labor and wages from ordinary times and doles them out, at a loss it is true, in difficult times."
Keynes and Keynesians, of course, give us arguments for under which circumstances it actually would add to jobs and total wages. I can't make the claim that Bastiat would agree with that (although given the chance to read the General Theory, he may have). But he certainly was not an opponent of counter-cyclical fiscal policy.
ReplyDeleteI thought it was a fair, interesting post by Brennan. I just had a little to add.