A Tiger by the Tail: The Keynesian Legacy of Inflation

The purpose of the Hobart Paperbacks is to discuss, in the spirit of what was once called ‘political economy,’4 the infl uences which affect the translation of economic ideas into practical policy and the economics of government activity. In the fi rst Paperback Professor W.H. Hutt examined the notion that some ideas are not adopted because they are considered to be ‘politically impossible.’ In the second Mr. Samuel Brittan analysed the consistency of British Government economic policy since June 1970. In the third Mr. W.R. Lewis analysed the confl ict between ideas and policy in the aspirations of the Treaty of Rome and the performance of its interpreters at Brussels. The translation of economic thinking into government action is perhaps nowhere more vividly illustrated than in the work of John Maynard Keynes. He was the most infl uential economist of our times, his ideas have infl uenced governments of all philosophic fl avours more than any other economist. Yet it is not clear that his work will survive longer than that of some of his contemporaries. Perhaps no economist more than Adam Smith has had both early infl uence on government policy and enduring infl uence on the thinking of economists of succeeding generations. The extent to which economic ideas are adopted by government does not necessarily refl ect their contribution to fundamental economic truths. The reasons for their adoption may range from respect for the new insights they show on the working of the economy to cynical political expediency.