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.”

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