In the Long Run Ferguson’s Dishonesty about Keynes’ Quotation Will be an Epic Fail
Himmelfarb and Ferguson cite Keynes’ famous observation (“in the long run, we are all dead”) as proof that his economics, warped by his homosexuality, were concerned only with the short-run. This is particularly disturbing for those who write history because, in context, that interpretation of what Keynes was actually saying is impossible for any honest historian to hold.
Krugman has just written a column explaining this point.
“One dead giveaway that someone pretending to be an authority on economics is in fact faking it is misuse of the famous Keynes line about the long run. Here’s the actual quote:
‘But 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.’
As I’ve written before, Keynes’s point here is that economic models are incomplete, suspect, and not much use if they can’t explain what happens year to year, but can only tell you where things will supposedly end up after a lot of time has passed. It’s an appeal for better analysis, not for ignoring the future; and anyone who tries to make it into some kind of moral indictment of Keynesian thought has forfeited any right to be taken seriously.
And there’s an important corollary: how you should go about getting to some desired long-run outcome may depend a lot on how you think the economy works in the short run.”
Ferguson’s Apology Is Also an Epic Fail
Ferguson’s “unreserved” apology is nothing of the kind. He does not apologize for his past efforts to smear Keynes. He tries to make it appear that the latest smear was a one-off, unthinking quip. It was neither. He apologizes for being “insensitive.” What could that mean in this context where he is supposedly agreeing that what he said was false – not true but “insensitive?” Ferguson simply made up the part about Keynes and “poetry.” Ferguson’s spreading of homophobic tropes isn’t “insensitive” in this context – it’s false and it is nasty.
Ferguson apologizes for forgetting that Keynes’ wife suffered a miscarriage. But what is the relevance of that fact to Ferguson’s smear or apology? Is he saying that the pregnancy falsifies his implicit smear that Keynes wasn’t “man enough” to have sex with a woman? Did he think gay or bisexual males were sterile or impotent? Why did he emphasize his claim that Keynes married “a ballerina?”
Why didn’t Ferguson apologize for his substantive misstatements? As a historian who has read Keynes he knows that Keynes’ quip about “in the long run we are all dead” had absolutely nothing to do with claiming that the longer-term health of the economy was unimportant or a matter in which Keynes was uninterested.
Here’s the portion of the initial news report (which expressed no criticism at Ferguson’s gay bashing) that shows the context of Ferguson’s attack on Keynes’ sexuality. The questioner, Paul McCulley (a famous, wealthy financial guru) asks a serious macroeconomics question. I’ve been on panels together with him in Ireland at the Kilkenomics Economics Festival. He is someone who was asking a question like this to smoke out Ferguson’s knowledge and beliefs about one of the most important macroeconomic questions.
Note that McCulley understands the context of Keynes’ famous quip about the long run – and the important substantive point that Keynes was making, which is why McCulley premised his question by quoting a longer excerpt from Keynes’ statement about the long run. Keynes was making the point that economic policies that might make sense in a context of an economy that was performing well at or near full employment would be nonsensical in a very different (“current”) economic context. One of the prime examples of where this would be true is if the economy were in a liquidity trap.
The reporter’s notes of Ferguson’s response to McCulley follow:
Paul McCulley
“‘The long run is a misleading guide to current affairs…in the long run we are all dead.’
Are we in a liquidity trap, are we at a zero bound of interest rates and stuck at 8% unemployment?”
“Keynes was a homosexual and had no intention of having children. We are NOT dead in the long run…our children are our progeny. It is the economic ideals of Keynes that have gotten us into the problems of today. Short term fixes, with a neglect of the long run, leads to the continuous cycles of booms and busts. Economies that pursue such short term solutions have always suffered not only decline, but destruction, in the long run.”
Notice that Ferguson not only does not answer McCulley’s question – he does not even address the question. Answering McCulley’s question correctly is critical to determining how we should respond to the ongoing crisis. It is also a tough question. If Ferguson agrees we are in a liquidity trap then his pleas for austerity are even more self-destructive. The notes show that Ferguson had earlier opined that monetary policy offered no real hope for recovery, which would suggest that he believed we were in a liquidity trap.
Ferguson’s response to a difficult question was to ignore the substance of the question and launch a diversionary strike on Keynes’ sexuality and to invent “ideals” that Keynes never held in order to blame him for “the problems of today.” Ferguson’s disingenuous apology only addresses one of these three wrongs. Indeed, it actually renews the other wrongs.
McCulley’s quotation of an excerpt from Keynes shows that McCulley understood that Keynes was not dismissing the importance of the long run. His quotation, while only a brief and partial excerpt, contains part of Keynes’ critical language: “Th[is] long run is a misleading guide to current affairs.” This makes Ferguson’s non-response to McCulley’s question, his willful distortion of Keynes’ quotation, his complete invention of a “ideal” (screw future generations) that he falsely assigns to Keynes, and his gratuitous, extended homophobic smear of Keynes that was designed to buttress Ferguson’s invention of a Keynesian “ideal” of screwing future generations and induce the audience to hold Keynes in contempt as “effete” even sadder.
Recall that reporter’s notes I have been citing about McCulley’s question and Ferguson’s non-answer are those of the reporter who expressed no criticism of Ferguson’s attacks on Keynes. If that reporter’s notes are accurate, then Ferguson’s apology is untruthful. Recall the key language I quoted above:
“ In his apology Ferguson explained: ‘I had been asked to comment on Keynes’s famous observation ‘In the long run we are all dead.’ The point I had made in my presentation was that in the long run our children, grandchildren and great-grandchildren are alive and will have to deal with the consequences of our economic actions.’ ”
If the notes are correct, then Ferguson’s apology is doubly dishonest. He was not asked to comment on Keynes’ quotation about the long run. He was asked to comment on a liquidity trap. In fuller context, he was being asked whether we needed to adopt fiscal stimulus because we were in a liquidity trap that made monetary stimulus ineffective. The second dishonesty is the one I have explained, Keynes’ observation about the long run is in fact “famous” and a British-educated Scot historian of economics who has written repeatedly about Keynes knows full well that Keynes did not support any “ideal” of indifference to the welfare of future generations and that Keynes’ quotation has nothing to do with Ferguson’s invented “ideal.” If anything, Keynes’ quotation shows his concern that we not screw up the future. Ferguson, however, used his nominal apology as a springboard to re-launch his primary falsehood – the claim that Keynes or Keynesian economics did not care about future generations.
Had Ferguson not ducked McCulley’s question he also would have been forced to discuss the harm his austerity principles did by leading to severe unemployment. McCulley’s question asked explicitly about the link between a liquidity trap and high, persistent unemployment. Ferguson’s claim that he is the one worried about our children and that Keynes is the author of all our problems today reverses the situation. It is those who have ignored Keynes and inflicted self-destructive austerity who have caused such devastating harm to the next generation in the Eurozone’s periphery. In Greece and Spain, youth and young adult unemployment is well in excess of 50% and in Italy it exceeds 36%. In much of the periphery university graduates feel they must emigrate. The people who are fighting to protect the next generation from the austerians are economists who learned from Keynes and thousands of later scholars that it is in fact insane to respond to a Great Recession or Great Depression with policies that make it worse.