Keywords: History of Ideas, Methodology & Philosophy;

The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions.

The ideas of economists and politicians, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical
men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist, Madmen in authority, who hear voices in the air, are distilling
their frenzy from some academic scribbler of a few years back. I am sure the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current
events are not likely to be the newest. But, soon or later, it is ideas, not vested interests, which are dangerous for good or evil.

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean will be flat again.

The political problem of mankind is to combine three things: economic efficiency, social justice, and individual liberty.

Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but in itself it is in many ways extremely objectionable. Lenin is said to have declared that the best way to destroy the capitalist system debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily.

We must aim at separating those services which are technically social from those which are technically individual. …… The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.

I should say that what we want is not no planning, or even less planning, indeed I should say we certainly want more. But the planning should take place in a community in which as many people as possible, both leaders and followers, wholly share [Fredrich Hayeks’] moral position. Moderate planning will be safe enough if those carrying it out are rightly oriented in their own minds and heart to the moral issues. This is in fact already true of some of them. But the curse is that there is also an important section who could be said to want planning not in order to enjoy its fruits, but because they hold ideas exactly the opposite of [his], and wish to serve not God but
the devil.

Regarded as a means the businessman is tolerable: regarded as an end he is not so satisfactory.

Americans are apt to be unduly interested in discovering what average opinion believes average opinion to be: and this national weakness finds its nemesis in the stock market. There is no clear evidence from experience that the investment policy which is socially advantageous coincides with that which is most profitable.

The social objective of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.

I believe that there is social and psychological justification for significant inequalities of income and wealth, but not for such large disparities that exist today.

It is better that a man should tyrannize over his bank balance than over his fellow-citizens.

I do not know which makes a man more conservative –– to know nothing but the present, or nothing but the past. I believe myself to be writing a book [The General Theory of Employment Interest and Money] which will largely revolutionise –– not, I suppose, at once but in the course of the next ten years –– the way the world thinks about economic problems.

Markets can remain irrational longer than you can remain solvent.

When the facts change, I change my mind. What do you do, sir?

Worldly wisdom teaches that it is better for the reputation to fail conventionally than to succeed unconventionally.

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Some additional gems

I see no reason to suppose that the existing system seriously misemploys the factors of production which are in use. There are, of course, errors of foresight; but these would not be avoided by centralising decisions. When 9,000,000 men are employed out of 10,000,000 willing and able to work, there is no evidence that the labour of these 9,000,000 men is misdirected. The complaint against the present system is not that these 9,000,000 men ought to be employed on different tasks, but that tasks should be available for the remaining 1,000,000 men. It is in determining the volume, not the direction, of actual employment that the existing system has broken down.