The Failure of the ‘New Economics’ thoroughly demolished the Keynesian system. Unfortunately, this “economic demolition” as Rothbard called it (Hazlitt 2007 [1959], xvi), went ignored by the mainstream despite it carrying implications that would have prevented the decline in theoretical vigor of mainstream economics that was Keynesianism. Hazlitt’s argument against Keynesianism was more than a mere theoretical critique; it was a robust argument fortified by sound economic theory and history. One area where Hazlitt excelled was in his critique of Keynes’ critique of the classical doctrine on unemployment.This paper will summarize Hazlitt’s discussion of Keynes’ rejection of the classical theory of unemployment. Secondly, Hazlitt’s arguments will be applied to evaluating modern macroeconomic
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