“Economists whosimply advised leaving the economy alone, governments whose firstinstincts, apart from protecting the gold standard by deflationary policies,was to stick to financial orthodoxy, balance budgets and cut costs, werevisibly not making the situation better. Indeed, as the depression continued,it was argued with considerable force not least by J.M. Keynes whoconsequently became the most influential economist of the next fortyyears - that they were making the depression worse. Those of us wholived through the years of the Great Slump still find it almost impossibleto understand how the orthodoxies of the pure free market, then soobviously discredited, once again came to preside over a global period ofdepression in the late 1980s and 1990s, which, once again, they wereequally unable to understand or to deal with. Still, this strange phenomenonshould remind us of the major characteristic of history which itexemplifies: the incredible shortness of memory of both the theorists andpractitioners of economics. It also provides a vivid illustration of society'sneed for historians, who are the professional remembrancers of what theirfellow-citizens wish to forget.”

“Surely by now there can be few here who still believe the purpose of government is to protect us from the destructive activities of corporations. At last most of us must understand that the opposite is true: that the primary purpose of government is to protect those who run the economy from the outrage of injured citizens.”

“Keynes was a great economist. In every discipline, progress comes from people who make hypotheses, most of which turn out to be wrong, but all of which ultimately point to the right answer. Now Keynes, in The General Theory of Employment, Interest and Money,set forth a hypothesis which was a beautiful one, and it really altered the shape of economics. But it turned out that it was a wrong hypothesis. That doesn't mean that he wasn't a great man!”

“free trade economists have argued that the mere co-existence of protectionism and economic development does not prove that the former caused the latter. This is true. But I am at least trying to explain one phenomenon - economic development-with another that co-existed with it - protectionism. Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries, when it simply had not been practised very much before they became rich.”

“It is still possible to find people who believe that government policy did not end the Great Depression and undergird the Great Prosperity, just as it is possible to uncover people who do not believe in evolution.”

“Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best of all economic systems—the freer the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.”