Thanks to Sumitra Shah, I have been able to read enough of Richard 
Posner's explanation of how he became a Keynesian -- just one and 
one-half pages.  How sad that Posner betrays his limited knowledge of 
economics, particularly that which Keynes misrepresents in the /General 
Theory/.  Just three illustrations:

Posner doesn't realize that the classical economists, including Adam 
Smith, treated economics as the science that explains peoples behavior 
or choices.  He could have read Alfred Marshall's /Principles/.  Thus, 
he claims that "The older view was that economics is the study of the 
economy, employing whatever assumptions seem realistic and whatever 
analytical methods come to hand. Keynes wanted to be realistic about 
decision-making rather than explore how far an economist could get by 
assuming that people really do base decisions on some approximation to 
cost-benefit analysis" (page 1).

Posner attributes to Keynes the insight that "that consumption is the 
'sole end and object of all economic activity,' because all productive 
activity is designed to satisfy consumer demand either in the present or 
in the future" (p. 2).  He does not realize that Adam Smith's /Wealth of 
Nation/ said that earlier: "consumption is the sole end and purpose of 
all production ... The maxim is so perfectly self-evident, that it would 
be absurd to attempt to prove it."

Posner also doesn't fault Keynes for including hoarding in his 
definition of saving.  Explanations of Keynes's error in that view by 
the likes of Frank Knight and Jacob Viner (University of Chicago) in 
their review of the /General Theory/ are not known to Posner.  So he 
goes on to declare: "For Keynes, in other words, it is consumption, 
rather than thrift, that promotes economic growth. And here the second 
key claim of Keynes kicks in: that people often save with no particular 
aim of future spending--they hoard" (page 2).

How sad, I repeat!

James Ahiakpor

Sumitra Shah wrote:
> http://www.tnr.com/article/how-i-became-keynesian
>
> This is the link to the Posner article. I read it long ago and went over it rather quickly again. I maybe wrong, but it doesn't seem to say anything as strange as what Professor Bostaph writes below. Unless it is one of Judge Posner's actual rulings I know nothing about.
>
> Sumitra Shah
> --------------------------------------------------------------------------------
> From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Samuel Bostaph [[log in to unmask]]
> Sent: Saturday, April 09, 2011 6:09 PM
> To: [log in to unmask]
> Subject: Re: [SHOE] SHOE: DeLong on Econ Ed (private)
>
> The thought that if someone is assaulted while walking in a "bad" part of town, Judge Posner will argue that he or she should pay for the urban renewal of the area to stimulate total spending.
> Samuel Bostaph, Ph.D.
> Champaign, Illinois
> "Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing happened."--Winston Churchill
>    


-- 
James C.W. Ahiakpor, Ph.D.
Professor&  Chair
Department of Economics
California State University, East Bay
Hayward, CA 94542

(510) 885-3137 Work
(510) 885-4796 Fax (Not Private)