Maynard's Revenge

The Collapse of Free Market Macroeconomics

ISBN 9780674050464

Publication date: 01/01/2011

Lance Taylor

It is now widely agreed that mainstream macroeconomics is irrelevant and that there is need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis. ’s book exposes the unrealistic assumptions of the rational expectations and real business cycle approaches and of mainstream finance theory. It argues that in separating monetary and financial behavior from real behavior, they do not address the ways that consumption, accumulation, and the government play in the workings of the economy.

Taylor argues that the ideas of J. M. Keynes and others provide a more useful framework both for understanding the crisis and for dealing with it effectively. Keynes’s basic points were fundamental uncertainty and the absence of Say’s Law. He set up machinery to analyze the macro economy under such circumstances, including the principle of effective demand, liquidity preference, different rules for determining commodity and asset prices, distinct behavioral patterns of different collective actors, and the importance of thinking in terms of complete macro accounting schemes. Economists working in this tradition also worked out growth and cycle models.

Employing these ideas throughout Maynard’s Revenge, Taylor provides an analytical narrative about the causes of the crisis, and suggestions for dealing with it.

Praise

Lance Taylor has written a tome for our times. It is engaging and forceful, the analysis is of the highest order, and the exposition of very complex ideas is wonderfully clear.

—Geoffrey Harcourt, University of New South Wales
There is a need for a careful analysis of why exactly much of mainstream macroeconomics is irrelevant and problematic, and whether a more useful and realistic kind of economic analysis exists which can provide a better understanding of real world events. Lance Taylor's book fills this need, providing an authoritative presentation of a more useful and realistic kind of macroeconomic analysis and deftly mingling theoretical analysis and critique with discussions of basic economic concepts. It is essential reading for anyone interested in how the economy works and how to make it work better and more humanely.

—Amitava Dutt, University of Notre Dame
Maynard's Revenge offers a broad rigorous account of the creation, consolidation, and eventual eclipse of Keynesian theory, as well as the phoenix-like return of Keynesianism. With his nose to the empirical ground, Lance Taylor compellingly builds his case that Keynes was correct about how to do macroeconomics in our world. But Taylor goes beyond Keynes, showing how 'ideas from the Master' have been extended by his many disciples into an impressive body of thought."

—Servaas Storm, Delft University of Technology, The Netherlands
[A] combative and tightly argued book on the collapse of the recent consensus in economics. Taylor strives to reinstate not just Keynes but an entire school of economics...The tone of the book fluctuates between being clinically academic and sharply polemical, a delightful combination often seen in the writings of Keynes himself...The deeper point Taylor makes is that much of modern economics is actually derived from insights provided by economists in previous ages. He powerfully illustrates this in almost every chapter in his book.

—Niranjan Rajadhyaksha, Mint
This volume is useful, and even entertaining, when viewed as a paean to Keynes and his ideas.

—E. Kacapyr, Choice