Hitler, Keynes, and inequality: Why economists fail

One of the economics blogs I like to follow has, for once, a post I have to take issue with.


Why Do Acemoglu and Robinson Resort to Hitler?

I suppose I should come clean. I sent an email saying:
This is nuts (re: Krugman and Wells): 
Hitler was a Keynesian, so it's not true that Republicans hate Keynes? Huh? They really don't make much of a case...as they seem to realize at the end.
The subject of the email was "Why Economists Fail."

I think this is a distortion of what Acemoglu and Robinson are saying. Remember that they also criticize Krugman for being US centric in his view of the right.

What they are saying is not that Keynesian economics is associated with Fascists, therefore Keynes = Hitler, but that conservatives oppose to Keynesian economic policies not because they are conservative but for other reasons. Remember the Bush stimulus program of 2007, where people got a tax refund? That was Keynesian. Remember how much government expanded under Reagan and Bush II, while Republicans insisted that it must fall under Clinton and Obama? Conservative beliefs turn out to be quite malleable, depending on who gets the benefits. That's because it is not so much a philosophy as a tribe. They oppose Keynesian stimulus and government growth under Democrats because they fear they might work, and make Democrats more popular. To think otherwise is to mistake ad hoc justifications for the actual reasons for their actions.

Remember that what these guys say the driving force in the way economic development occurs is not knowledge or ideology, but inclusive vs extractive institutions. I believe their view is that Republicans are fighting against policies that make the country as a whole more prosperous because Republicans are more concerned with making sure the "right" people get most of the benefits of the economy. They fight against policies that might make the country more prosperous because they want the people who finance the Republican Party to get most of the benefits of the economy.

The entire thesis of Why Nations Fail (which I've started reading) is that they fail because their political institutions serve a small group that benefits from that failure.Looking for the purer motives of ideology distorts the nature of the political struggle we are engaged in, to determine whether our institutions will be inclusive or extractive.