H.R. 4732 and H.R. 6635 9. regarding a bill leaving patent rights with "No act of Congress has been called to our The amendment does not, however, challenge the basic d. This Subcommittec, itself, has on frequent occasion conɛidered bills which involved issues of employer-cmployer allocation and employce copcusation, pursuant to its Clause & delegated authority. à recent exemple is I.R. 6933, e. Again, numerous other instances could be cited supporting D. Conclusion The foregoing discuɛsion conclusively demonstrates, in our opinion, that the answers to the question posed in E, e (supra, page 2) is unquestionably "YSC" with respect to all four types of provisions. 124 THE TWO GREATEST economists of this century, Joseph A. Schumpeter and John Maynard Keynes, were born, only a few months apart, a hundred years ago: Schumpeter on Feb. 8, 1883 in a provincial Austrian town, Keynes on June 5, 1883 in Cambridge, England. (And they died only four years apart-Schumpeter in Connecticut on Jan. 8, 1950, Keynes in southern England on Apr. 21, 1946.) The cente nary of Keynes' birth is being celebrated with a host of books, articles, conferences and speeches. If the centenary of Schumpeter's birth were noticed at all, it would be in a small doctoral seminar. And yet it is becoming increasingly clear that it is Schumpeter who will shape the thinking and inform the questions on economic theory and economic policy for the rest of this century, if not for the next 30 or 50 years. THE TWO MEN WERE NOT ANTAGONISTS. Both challenged long-standing assumptions. The opponents of Keynes were the very "Austrians" Schumpeter himself had broken away from as a student, the neoclassical economists of the Austrian School. And while Schumpeter considered all of Keynes' answers wrong, or at least misleading, he was a sympathetic critic. Indeed, it was Schumpeter who established Keynes in America. When Keynes' General Theory came out, Schumpeter, by then the senior member of the Harvard economics faculty, told his students to read the book and told them also that Keynes' work had totally superseded his own earlier writings on money. Keynes, in turn, considered Schumpeter one of the few contemporary economists worthy of his respect. In his lectures he again and again referred to the works Schumpeter had published during World War I, and especially to Schumpeter's essay on the Recbenpfennige (i.e., money of account) as the initial stimulus for his own thoughts on money. Keynes' most successful policy initiative, the proposal that Britain and the U.S. finance World War II by taxes rather than by borrowing, came directly out of Schumpeter's 1918 warning of the disastrous consequences of the debt financing of World War I. Schumpeter and Keynes are often contrasted politically with Schumpeter being portrayed as the "conservative" and Keynes as the site is more nearly right Politically Keynes' views were quite similar to What we now call "neoconservative. His theory had its origant in his passionate attachment to the free market and in his desire to keep politicians and governments out of it. Schumpeter, by contrast, had serious doubts about the free market. He thought that an "intelligent monopoly"-the American Bell Telephone system, for instance-had a great deal to recommend itself. It could afford to take the long view instead of being driven from transaction to transaction by short-term expediency. His closest friend for many years was the most radical and most doctrinaire of Europe's left-wing socialists, the Austrian Otto Bauer, who, though staunchly anticommunist, was even more FORBES, MAY 23, 1983 45-025 O 85 AND KEYNES sometimes unknowingly, are following the wrong prophet. anticapitalist. And Schumpeter, while never even close to being a socialist himself, served during 1919 as minister of finance in Austria's only socialist government between the wars. Schumpeter always maintained that Marx had been dead wrong in every one of his answers, or ar considered himself & you of Mars and held him in greater esteen dom ny other economist AT TEASE So be argued sked the fixat question and to Schumpeter ques tions were always more important than answers. The unfferences between Schumpeter and Keynes go much deeper than economic theorems or political views. The two saw a different economic reality, were concerned with different problems and defined "economics" quite differently. These differences are highly important to an understanding of today's economic world. Keynes, for all that he broke with classical economics, operated entirely within its framework. He was a "heretic" rather than an "infidel." Economics, for Keynes, was the equilibrium economics of Ricardo's 1810 theories, which dominated the 19th century. This economics deals with a closed system and a static one. Keynes' key question was the same question the 19th-century economists had asked: "How can one maintain an economy in balance and stasis?" For Keynes, the main problems of economics are the relationship between the "real economy" of goods and services and the "symbol economy" of money and credit, the relationship between individuals and businesses and the "macro-economy" of the nation-state, and finally, whether production (that is, supply) or consumption (that is, demand) provides the driving force of the economy. In this sense Keynes was in a direct line with Ricardo, John Stuart Mill, the "Austrians" and Alfred Marshall. Howev er much they differed otherwise, most of these 19thcentury economists, and that includes Marx, had given the same answers to these questions: The "real economy" controls, and money is only the "veil of things", the micro-economy of individuals and businesses determines, and government can, at best, correct minor discrepancies and, at worst, create dislocations, and supply controls, with demand a function of it. KEYNES ASKED the same questions that Ricardo, Mill, Marx, the "Austrians" and Marshall had asked but, with unprecedented audacity, turned every one of the answers upside down. In the Keynesian system, money and credit are "real," and goods and services dependent on, and shadows of, the "symbol economy", the macro-economy, the economy of the nation-state, is everything, with individuals and firms having neither power to influence, let alone to direct, the economy nor the ability to make effective decisions counter to the forces of the "macroeconomy", and economic phenomena, capital formation, productivity and employment are functions of demand. By now we know, as Schumpeter knew 50 years ago, that every one of these Keynesian answers is the wrong answer. At least they are valid only for special cases and FORBES, MAY 23, 1983 125 |