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G. R. Steele is Reader in Economics at the Lancaster University Management School. His book, The Economics of Friedrich Hayek (2nd edn., 2007) is published by Palgrave Macmillan (


Keynesianism supports make-work schemes without regard for consumers' preferences. The impact of fiscal and monetary policy in corrupting the flow of inter-temporal production is entirely discounted. Where Keynes argued that long-term considerations should not obstruct the implementation of short-term palliatives for immediate problems, Keynesianism fosters belief in the judgement of the state across a wide range of expenditures. In effect, however, Keynesian concepts of aggregate demand and the income multiplier set no basis for sound economic policy.