Ferguson’s comments, first reported by Tom Kostigen, came as part of a critique of Keynes’ ideas about responding to economic recessions and depressions at a finance conference in Carlsbad, California. Keynes is the intellectual godfather of the idea that ramping up government spending, usually financed by borrowing, can ameliorate recessions, the theory behind both the New Deal and President Obama’s stimulus. Ferguson, who’s recently been a harsh critic of deficit spending, argued that Keynes could only countenance higher deficits and debt because his sexual orientation meant he had no reason to care about the children that might have to pay the borrowed money back. As Kostigen reports:
Speaking at the Tenth Annual Altegris Conference in Carlsbad, Calif., in front of a group of more than 500 financial advisors and investors, Ferguson responded to a question about Keynes’ famous philosophy of self-interest versus the economic philosophy of Edmund Burke, who believed there was a social contract among the living, as well as the dead. Ferguson asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of “poetry” rather than procreated. The audience went quiet at the remark. Some attendees later said they found the remarks offensive…
Ferguson, who is the Laurence A. Tisch Professor of History at Harvard University, and author of The Great Degeneration: How Institutions Decay and Economies Die, says it’s only logical that Keynes would take this selfish worldview because he was an “effete” member of society. Apparently, in Ferguson’s world, if you are gay or childless, you cannot care about future generations nor society.
Setting aside the utterly wrong, offensive character of Ferguson’s attack, it’s wrong on both biographical and economic grounds. Though it’s obviously hard to make these sorts of judgments about long-dead historical figures, Keynes appeared to be more accurately described as bisexual rather than gay: in a point that goes directly to Ferguson’s accusation, Keynes’ wife’s pregnancy ended in miscarriage.
Moreover, the idea that Keynesian economics is indifferent to future generations is based on one out-of-context quote and an elementary misreading of Keynes’ views about deficit spending. It’s true that Keynes supported borrowing money during recessions, but the point of borrowing was to finance spending that would stimulate a faster economic recovery, which would in the long run both reduce unemployment and deficits. Keynes also believed that, in good economic times, the government should save money so it could have a reserve to spend without needing to borrow too much during recessions. These are hardly the views of an advocate of untrammeled borrowing at the expense of people down the line.
Though Ferguson “deeply and unreservedly” apologized for his comments, it’s not the first time he’s bashed Keynes on the basis of his sexual orientation. His 1999 book The Pity of War suggested Keynes, who was an the time an important adviser for the British Treasury around World War I, let a crush on the German negotiator determine determine his position on the post-war settlement. In the same book, Ferguson cracked that Keynes’ “sex life went into decline” during the war, “perhaps because the boys he liked to pick up in London all joined up.”
Using Keynes’ orientation to dismiss his economic views is a pastime with a long pedigree on the right — a point that some modern conservatives made in defense of Ferguson’s statements. Economic historian Brad DeLong compiled a long list of them — see, for example, neoconservative doyenne Gertrude Himmelfarb’s claim that “Keynes’s famous remark, ‘In the long run we are all dead’, also has an obvious connection with his homosexuality.”
What’s particularly curious about Ferguson’s outburst is that he used to endorse Keynesian views about deficit spending. Though he’s penned many acerbic critiques of the Obama Administration’s stimulus, he used the same Keynesian arguments he now disparages to defend the Bush tax cuts in 2003.