The Keynesian Episode: A Reassessment, by William H. Hutt, Indianapolis: Liberty Press, 1979, 449 pp., $10.00/$4.50.
Professor William H. Hutt is one of the last of the irrepressibly cheerful and courteous martyrs of the Keynesian revolution. As a leading disciple of the doughty Edwin Cannan of the London School of Economics, Hutt was just reaching the height of his powers as an economist when he was hit by the tidal wave of the Keynesian revolution in the mid-1930s. A few years after the revolution struck, there were only a few pre- and anti-Keynesians left: Mises in Vienna; his outstanding student Hayek, who had migrated to London; and Hutt—a methodological and ideological cousin, so to speak, of the Austrians—in South Africa.
Though isolated and neglected, Hutt embarked on a highly productive career, undaunted in his devotion to economics, to free markets and hard money, and in his profound and uncompromising opposition to the Keynesian and "post-Keynesian" system. If his books in the 1930s were rarely read, this was particularly true of his comprehensive and profound critique, Keynesianism—Retrospect and Prospect (1963). Published in the midst of the dark days of total Keynesian domination of American economics, the book sank without a trace—helped, I must admit, by Hutt's uncharacteristically dense and difficult style.
Despite this, the book contains what is still the finest critique of the Acceleration Principle ever written. The book, as well as Hutt's other writings, is marked by a persistent and welcome emphasis on the vital importance of the market price system as a coordinating process. Thus, Hutt has been the foremost economist to stress that the only cause of unemployment of resources, land, or capital is the owner's insistence on charging a price or wage higher than what the market will bear (what Hutt calls "withheld capacity.")
The last few years have seen a heartwarming resurgence of Bill Hutt's publishing activity, both in new books and in reprints and new editions of earlier volumes. The recent renaissance of free-market and Austrian School economics has provided a far more favorable climate for receiving his writings than at any other time in a half century.
The new Keynesian Episode is essentially an elaborate reworking of his earlier Keynesianism. The style is now lighter; the analysis is interspersed with fascinating tidbits about other economists and the changing tides of economic opinion. The book can be read on two levels: as a still-comprehensive critique of Keynesianism and as a rich storehouse of references and insights on numerous relevant topics.
It is cheering to see this warm and buoyant octogenerian begin to receive some of the plaudits and honors he so richly deserves. May this be only the beginning of a new and lengthy phase in Bill Hutt's noble and remarkable career.
Murray Rothbard is a professor of economics at Brooklyn Polytechnic Institute of New York.