Why do right wingers hate Keynes so much?
It’s not because they don’t believe “Keynsian stimulus” works - although they pretend otherwise. Listen to Republicans talk about Federal spending on the military or state spending on roads - they know that government spending can create jobs and wealth even if they usually say the opposite. What Republicans and Hayekians and the other right wingers hate about Keynes is that he explained how poverty and scarcity and struggling to make a living and competing just for basics are all unnecessary.
A modern industrial economy, based on markets, without a “command economy” or bureaucratic management of everything can provide both opportunity for wealth and success and a basic good standard of living for everyone. In the 1960s and 1970s, even market fundamentalists like Milton Friedman advocated that the government could pay everyone a basic living wage. Just offer every person the option of a basic living for when they were sick or studying or taking care of little kids or thinking up a great invention or writing poetry or catching some rays or whatever. People who wanted more or want to be useful would work. Friedman said this program would be cheaper and less demeaning and more effective than 100 different welfare programs all of which have bureaucratic overhead and have to spend a lot of money in a not very effective effort to prevent cheating. In those days people then spoke about “post-scarcity” economics.
As Keynes had shown, and as J.K. Galbraith helped prove, government actions can create market conditions for economic growth and general prosperity high enough to be able to afford such a program. For example, the government funded basic research and then the initial development of the Internet, generating a huge increase in prosperity. None of this was all that new: Adam Smith pointed out that if the government kept interest rates low the markets would favor well thought out investment, but if rates went up too high investors would speculate and harm national prosperity (ahem, Lehman Brothers). But it was Keynes who first explained that poverty and insecurity could be cured within market systems with some limited assistance from the government.
Here’s Keynes writing just after WWI to explain that market systems in which all the gains are grabbed by a very small number of people are unstable and unnecessary:
I seek only to point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it, and to emphasize that this principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bluff is discovered; the laboring classes may be no longer willing to forego so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they last, and thus precipitate the hour of their confiscation.
But this is heresy to conservatives. The conservatives tell the public that the only alternative to a system in which “few enjoy the comforts of life” is some despotic Stalinist state. “Put up with David Koch dumping poison in the sea and buying Senators”, they say, because the only alternative is misery for all and the despotism of a command economy. Keynes showed that was nonsense.
A dynamic market economy without fear and scarcity is the last thing conservatives want - because it would limit the power of the elite. For conservatives, when a “job creator” threatens to shut down low wage jobs unless he gets more government subsidies, less regulation of harmful environmental effects, less job safety, and no taxes the response should be be craven fear and obedience.The idea that the response could be: someone else can organize that work better, safer, more profitably, and more cleanly, terrifies the entrenched “incumbents” at the top of the heap, their paid propagandists and flacks, and people who enjoy servility. And face it, the popular support for the right is from people who take pleasure in the misery of others, fear change, and love having “powerful” bosses. You know, the kind of people who as kids followed the bully and cheered him on. Impertinent rabble rousers, entrepreneurs, inventors, tinkerers, innovators, union organizers, do-gooders and other trouble makers who want to change the world , are poorly suited to conservatism. So are people who just want to do their part and carry their share of the work
Why do conservatives hate Keynes? Because Keynes showed that market economies can be post-scarcity economies and that the deprivation,uncertainty, fear and insecurity that are so much a feature of our present economy can all be cured. Conservatives need deprivation and insecurity to keep the serfs in line. They don’t hate Keynes because his suggested policies don’t work They hate Keynes because his suggested policies do work. A party that wins office by scaring people with lies about how immigrants are going to take their jobs or black people are going to take all the welfare or other nonsense would be lost if nobody was scared.
Minor edit: 08/17/2013