Keynes on Austerity

From the Halley Stewart Lecture, 1931: "The World's Economic Crisis and the Way of Escape". From the essay by J. M. Keynes. I found the quote in an old post at haroldchorneyeconomist.

For clarity I have used the word "austerity" in the first sentence, in place of Keynes's word "economy" in the quote below:

"An austerity campaign, in my opinion, is a beggar-my-neighbour enterprise, just as much as competitive tariffs or competitive wage-reductions, which are perhaps more obviously of this description. For one man’s expenditure is another man’s income."

The quote from Keynes reminds me: Back in 2010 I read an interview with Dr. Kurt Richebacher. Here is the part that struck me:

Q: Give us the cause of the profits problem.

A: Corporate cost cutting, for one. The widespread measures that individual firms take to improve their own profits have, in the aggregate, the opposite effect on the profits of other firms. Business spending is the key source of business revenues, not consumer spending. A retrenchment in business spending cuts business revenues. Higher profits and higher prosperity cannot possibly come out of general cost cutting.

It is the same story Keynes told: the Austerity Cannot Work story.

For the record, Richebacher was identified as Austrian. Keynes, of course, was the Keynesian, until later Keynesians redefined the meaning of the term.