This week Lars Christensen is hosting 4 posts on Keynes by Clark Johnson. Clark wrote an excellent book on the role of gold in the Great Depression, which has influenced recent work by Doug Irwin—particularly the hypothesis that French gold hoarding played a big role in the severe 1929-33 deflation. Clark is also a very shrewd reader of Keynes. Here is the concluding paragraph (but read the whole thing):
So here we are. We saw an historically sharp recovery for four months during 1933, driven almost entirely by a decision to break the straightjacket imposed on monetary policy by the international gold standard. Keynes had previously been an able critic of the gold standard, for example in the Tract on Monetary Reform (1923) and then in several chapters in the Treatise. The 1933 recovery was then stalled by micro-policies [the NIRA] of which he was explicitly critical. Yet Keynes seemed to dismiss this entire episode in his call a few months later for fiscal stimulus!
I should add that I’ve known Clark for many years. He gradually convinced me that I know nothing about foreign policy, which is why I never blog on that topic. (He was too polite to say this in so many words, it’s just that I noticed that subsequent events always showed that he was right and I was wrong.) I would describe his overall views as being politically moderate, and although his post is somewhat critical, Clark actually has enormous respect for Keynes, especially his Treatise on Money.
I look forward to the next 4 posts.