Let’s face it. When an intellect of Milton Friedman’s stature declared in 1965 that “we are all Keynesians now,” the remark should have served as a canary warning that Keynesian economics was in real trouble. Friedman would later clarify that remark and, within a few years, his own theory of “monetarism” emerged as a viable alternative to managing the macroeconomy.

So almost 50 years later, when a critic of Keynesian economics like Harvard historian Niall Ferguson startled a crowd of financial advisors and investors by dismissing John Maynard Keynes' stance on long-run economics as a consequence of his sexual preference, it sounded feeble and ignorant. Particularly when so many legitimate criticisms of Keynes’ economic theories have surfaced in the last half-century.

When Ferguson’s comments were reported last week by our editor-at-large, Tom Kostigen, Ferguson’s remarks sparked an international uproar. Jonah Goldberg at the National Review wrote at least two articles on the subject. Slate and The Huffington Post were all over it. The British press, as is their want, had a field day.

Ferguson, who is famous for bombastic utterances, quickly apologized. That is not something he often does, according to the Harvard Crimson, which has more experience tracking the professor’s “off-the-cuff” quotes than the rest of us.

From the tone of his apology, Ferguson was clearly upset and sincere. Yet he did himself no favors by following it up with an “An Open Letter To The Harvard Community,” which prompted one wag to note that “like some people eat potato chips, Ferguson spots gays in history."

Nevertheless, when an economist like Keynes reaches a certain level of significance, historians have every right to study his personal life. Ultimately, a public figure's private life may turn out to be completely irrelevant to his professional life. But what Ferguson failed to do was place Keynes personal life in the larger context of his childhood, life, times, circumstances and other reference points.

My favorite Keynes' observation dealt with the long run in a different situation. When asked during the Great Depression whether mankind had ever experienced anything so devastating, he responded, "Yes, it was called the Dark Ages and it lasted 1,000 years."

I started thinking about some of these issues back in April, when I heard a financial services executive remark that one reason the Greatest Generation was so great was that the generation before it was so irresponsible. The end of World War I led to massive famine in Europe, followed by hyperinflation. The experience of hyperinflation spawned the rise of fascism and The Third Reich. It haunts Germany, and thereby the rest of Europe to this day.

America emerged from The Great War far less scarred. A nasty recession quickly ended and the Gatsby-esque Roaring Twenties ensued. The nation partied on until the stock market crashed in 1929. The Great Depression gave us the New Deal and I suspect even its loudest critics would view the rise of social insurance programs as a more reasonable reaction to hard times than goose-stepping fascism.

Which brings me to the Mad Men lifestyle of Europe’s two leading economists of the 1920s, Keynes and Austrian Joseph Schumpeter. No doubt, Keynes was bisexual before World War I and Schumpeter was a hard partier.

In her brilliant book, Grand Pursuit: The Story of Economic Genius, Sylvia Nasar chronicles Schumpeter’s 1919 stint as Austria’s finance minister:
 
“Separated from Gladys, apparently for good, Schumpeter flaunted his bachelor lifestyle.  . . .  He threw teas and dinners for the likes of the Rothschilds, Wittgensteins, and other plutocrats, as well as foreign diplomats, journalists, and politicians. He often pulled up to the ministry in an ostentatious horse-drawn carriage. He ate in the best restaurants, drank the finest French champagne and often had a call girl or two sitting beside him in his carriage. It was a manner of living far beyond a cabinet officer’s pay grade, and it was obvious that Schumpeter was running up debts to his wealthy friends.”
 

In contrast to the bawdy lifestyles of Keynes and Schumpeter, America’s leading economist, Yale University’s Irving Fisher, was equally active, according to Nasar. Fisher was a serious academic whose theories about interest rates are still viewed as illuminating today. But as might be expected of an American, Fisher’s outside energies were focused on building his small business, cheering on the stock market, rooting particularly hard for his Remington Rand shares and options, and trying to impress his wealthy in-laws. Sadly, Fisher will be remembered mostly for his famous prediction two weeks before the October 1929 stock market crash that “stocks had reached a permanently high plateau.”
 
It would be easy for an American chauvinist to note that these are just a few more examples of why Americans were well-meaning, albeit naïve, industrious people, while Europeans were decadent dilettantes long ago. But it is too easy a takeaway. After all, America, founded by puritans who allegedly carried more beer than water on the Mayflower, enacted prohibition in 1919, opening the door to organized crime, while failing to prevent brilliant young talents like F. Scott Fitzgerald from drowning themselves in alcohol.
 
Both Europe and America tried their hardest to spend the 1920s blotting World War I out of their consciences. Europe, in particular, lost a generation of young men. Germany suffered total casualties of 2.46 million people, or 3.8% of its population; France lost 1.7 million, or 4.3% of the population; and the United Kingdom saw its population thinned by just under 1 million, or 2.2%. Think that’s bad? The Ottoman Empire lost 2.9 million, or 13% of its population, while Serbia suffered 725,000, or 16.1%.
 
Australia and Canada, tiny countries at the time, each lost over 60,000 people, more than America lost in Vietnam. And we are still living with the legacy of that war today.
 
All this is to say that if the libertine Mad Men/Rat Pack lifestyles of Keynes, Schumpeter and millions of others on both sides of the Atlantic were hardly a model of rectitude, it was understandable. Given the magnitude of economic crises like famine and depression they were confronted with, it’s understandable that they questioned if civilization would ever see “the long run.” Robert Skidelsky, Keynes' biographer, recently wrote in The Washington Post, that the economist stressed the short term because his times were characterized by ubiquitous pain almost all the time. Contrast that with the long term which was so uncertain and it's easy to see where he chose to focus. Ironically, who knew then that the 20th Century would usher in the most dramatic changes in life expectancies of the millennium.
 
Today, it’s fashionable to criticize the spoiled, drug-crazed flower children of the 1960s—criticism with much justification. But if 10-year-olds are told every week in the 1950s to conduct a preposterous drill of sticking their heads in their lockers to save themselves in the event of a thermonuclear missile attack, it shouldn’t be surprising that they behave recklessly with little regard for their health once they are on their own.
 
Nasar’s book provides a distant mirror to today’s economic predicaments. By the 1930s, leading economists were behaving like ship captains sailing in a convoy during an interminable hurricane, each shouting ideas and observations back and forth about how to escape the storm. However, in contrast to today’s puerile and petulant debates over austerity versus stimulus, the participants in the 1920s and 1930s genuinely cared as much about the suffering of the population as the validity of their own ideas. Things were a whole lot worse then and egos were smaller.
 
I know virtually nothing about the personal lives of the two leading economists of the post-World War II era, Paul Samuelson and Milton Friedman. But I do know they disagreed on many topics, yet were good friends. Given that they lived into their 90s and were both extremely lucid, it’s hard to imagine they were party animals. After all, there was only one Winston Churchill. It’s also hard to imagine Greatest Generation economists Samuelson and Friedman behaving in the mud-slinging fashion of folks like Ferguson, or for that matter Paul Krugman.
 
We never got around to discussing the flaws in Keynesian economics, but I’ll leave you with one. He predicted that by this time in history society would become so wealthy that the majority of individuals could work part-time and live a life of leisure. Ooops. I doubt that resonates with millions of unemployed in Europe or those in America struggling to get by on a couple of part-time jobs.

A final note: We, as ordinary citizens, have the same right to demand information from academics as we do from politicans, even if they choose to ignore us. So when I heard the University of Massachussetts professor who supervised the student who exposed the errors in Harvard professors Rogoff and Reinhart detail one particular error, i feel compelled to join the chorus. In particular, Rogoff and Reinhart, measuring the impact of government debt on GDP growth, assigned the same weight to one year for one nation, 1951 for New Zealand, when it suffered a near-depression, as they did to 19 years of U.K. data, when the British Isles experienced 2.5% GDP growth despite heavy government debt.

If Rogoff and Reinhart refuse to answer the U Mass professor, it's obvious they won't answer me. Fine. They can keep saying coding errors and arbitrary weightings that would appear to tilt their results to favor a particular conclusion are insignificant. But they shouldn't expect people to keep believing them.