A Diehard Keynesian View of the World

By Shahabi-Azad, Shahrokh | Inroads, Winter 2005 | Go to article overview

A Diehard Keynesian View of the World


Shahabi-Azad, Shahrokh, Inroads


A diehard Keynesian view of the world

Timothy Lewis, In the Long Run We're All Dead:

The Canadian Turn to Fiscal Restraint. Vancouver:

University of British Columbia Press, 2003. 288 pages.

TIMOTHY LEWIS'S In the Long Run We're All Dead IS A LOOK AT THE history of Canadian fiscal policy and the changing position of successive governments on fiscal restraint. Lewis suggests that the shift away from deficit financing has been a direct result of the victory of neoliberal ideas about these issues in Ottawa, and the waning influence of Keynesian macroeconomic analysis.

Lewis puts in historical perspective an alleged shift in Canadian fiscal policy from one of direct involvement in economic activity and "smoothing of business cycles" to a more conservative approach. This shift is coincident - and in Lewis's account intimately linked - with what he regards as Canadians' tragic loss of faith in Keynesianism which, though not entirely discarded, lost its preeminence by the late 1970s. Lewis further suggests that Canada's liberalization of trade policy, along with the global economic change from protectionist policies toward greater integration, further served to reduce the role of Keynesianism and deficit finance in the tool kit of Canadian governments.

Although the book is an interesting read, I have mixed feelings about it. Lewis obviously has a bias and makes no attempt to hide it. He reminisces about Keynesianism and seems to long for a return to deficit finance in the name of social justice and equity.

We are all allowed our ideological conclusions. However, Lewis seems to lack an understanding of the interplay of economic and political cycles, and this lack of understanding has led to dubious conclusions about government fiscal policy. He should know better than to suggest that all pursuit of discretionary policy is an attempt to return to the golden days of Keynesian economics. Granted, there was a period in Canadian economic policy when deficit finance and government discretionary policy were the norm. It was the common wisdom of the post-World War II era that government had not only a role but also a responsibility in smoothing out the business cycle. This policy worked during the period for which it was designed. However, rising inflation and the concurrent high unemployment rates of the 1970s required a change in direction.

Lewis talks of the shut in public opinion, and growing opposition in the 1980s to undisciplined fiscal behaviour, with an element of surprise. He seems unable to comprehend that the change in public opinion toward deficit financing was not some purely ideological shift of the Zeitgeist. It came amid a rising debt/GDP ratio, rising costs of servicing the public debt and ominous warnings from financial markets about a Canadian public debt selloff. Lewis implies there is nothing wrong with continued deticit finance, that a growing national debt is not a concern and that, even if there were high levels of inflation concurrent with high levels of unemployment, there is no proof thai Keynesian policies were to blame.

The tone of Lewis's argument at times leads me to believe that he is convinced that Keynesian economics - and with it deficit financing - should return. His motivations become clear when he suggests that Brian Mulroney's victory over John Turner in 1984 was an "indication that the economics of the 'just society' were increasingly out of fashion and the economies of Bay Street rather more in vogue." To Lewis, it is Keynesian economics or nothing at all. To deviate from government tax-and-spend policies (or just spend policies) is to abandon the just society. At this point, Lewis lets his biases and preferences get in the way of objective analysis of the implications of Canada's pursuit of deficits without end. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Diehard Keynesian View of the World
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.