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article imageKeynesian economics ruined because John Maynard Keynes was gay?

By Eko Armunanto     May 4, 2013 in Business
Harvard Professor Niall Ferguson told all the audience of financial advisors and investors that Keynesian economics was flawed because John Maynard Keynes himself didn’t care about future generations as he was gay and wasn’t planning to have children.
Responding to a question about the nature of self-interest in Keynes' economics versus Edmund Burke’s social contract, Ferguson said Keynes had no children because he was a homosexual and married to a ballerina with whom he likely talked about poetry rather than having children. In his book Reflections on the Revolution in France, Edmund Burke said “society is indeed a contract not only between those who are living, but also between those who are dead and those who are to be born.”
The implication of Keynes being gay, according to Ferguson, is that Keynesian economics, which prioritizes growth over reducing debt in the short term, doesn’t care about the accumulation of national debt, and therefore the future.
“It's only logical that Keynes would take this selfish worldview because he was an effete member of society. Apparently if you are gay or childless, you cannot care about future generations nor society. Burke had many children, Keynes had none, and thus Burke believed in a social contract that would endure for generations, while the childless-gay Keynes believed in a philosophy of self-interest,” Ferguson went on to say at the Tenth Annual Altegris Conference in Carlsbad, California, in front of a group of more than 500 financial advisors and investors.
Tom Kostigan from Financial Advisor reported that at first all the audience went quiet, but later some of them said they found the remarks offensive. They say the remarks imply that gays and the childless are responsible for the increase in global debt recently because they don’t care for the future.
“Not only is this intellectually void, it’s mad. And anyone with a moral conscience should be outraged. It is one thing to take issue with a society fueled by self interest and one fueled by a larger ethic. But it's entirely vulgar to make this argument about sexual preference – and to do so glibly,” Kostigan said.
“I'm genuinely shocked by Niall Ferguson, which is weird, since this is entirely in character,” said Reuters’Felix Salmon on Twitter responding the Kostigan report.
“Ferguson's remarks would represent a new low in the war of words between these economic camps, and they could be very damaging to his reputation. Saying that Keynes' economic philosophy was based on him being childless would be like saying that Ferguson's own economic philosophy is based on him being rich and famous and therefore not caring about the plight of poor unemployed people. As yet, the remarks have not been confirmed, and we eagerly await Professor Ferguson's response,” Henry Blodget reported for Business Insider while waiting for the professor’s further statements.
Knowing that his remarks sparked huge intellectual controversy, Ferguson had finally sent an email to Business Insider to apology, which was also posted on his own blog:
My disagreements with Keynes’s economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life. As those who know me and my work are well aware, I detest all prejudice, sexual or otherwise.
My colleagues, students, and friends – straight and gay – have every right to be disappointed in me, as I am in myself. To them, and to everyone who heard my remarks at the conference or has read them since, I deeply and unreservedly apologize
There has been a debate for quite some time about Keynesian economics ruining global economy. Professor Ferguson has been loudly and consistently warning for years that the deficit spending and debts of most developed countries will eventually end in disaster.
Professor Ferguson, as one of those who believe in slashing government spending and cut deficits during a time of economic weakness or recession – an Austrian school of thought also known as "the austerian", suggests that governments should immediately cut spending and balance their budgets, even if this results in a brutal short-term recession and exploding unemployment. Contrary to this notion, Keynesian philosophy advocated by Paul Krugman says that governments should enact stimulus and run big deficits during weak economic periods to offset weak private-sector spending and help shore up employment, consumer spending, and social well-being until the private sector recovers. High debts and deficits are a long-term concern that needs to be addressed, but they do not constitute a near-term crisis that requires immense, self-inflicted, short-term pain to alleviate.
However, Paul Krugman has appeared to be the winner as empirical facts of many countries in the past five years suggest Krugman's philosophy is correct, and, as yet, none of the doom predicted by Ferguson has come to pass. Paul Krugman said stimulus spending would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.
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