The Truth of Liberal Economy

Book excerpt: This book provides historical, theoretical, and biographical perspectives on two giants of contemporary economics, Jacques Rueff (1896-1978) and John Maynard Keynes (1883-1946). The former French bureaucrat and academician championed classical economics; the latter British economist founded macro-economics criticizing the classical school. Depending upon archival sources, including personal correspondences between the above two figures, the book describes furious debates between them and surrounding them. In fact, the two economists proposed contrasting diagnosis over almost every event in contemporary world economy: the reparations problem, the Great Depression, the gold exchange standard, and the Bretton Wood System. Keynes appraised managed currency to cope with unemployment, criticizing the classical gold standard; Rueff believed the function of market mechanism, blaming the state intervention. The book highlights deep influence of Rueff, rather larger than Keynes, in Europe before and after WWII. The perspective of the book reaches today’s economic issues. The classical view of Rueff was shared in Mont Pelerin Society, a cradle of neo-liberalism. Rueff’s market-friendly view paved way to the neo-liberal reforms which took place after the 1980s. The classical market theory of Rueff, together with dialogues with the labor unions, prepared the social background of the European Union. This book thus reveals the truth of liberal economy, from the 20th to 21st centuries.