Critique of Keynesian Economics and the Gold Standard

Mainstream economics, particularly post-1930s Keynesianism, faces criticism for lacking rigor and validity in its use of equations without units, rendering them meaningless. There is a historical misconception that the abandonment of the gold standard in the 1930s caused the Great Depression; however, it is argued that the gold standard was effectively abandoned during World War I, leading to inflationary practices that triggered economic decline. Key elements of the Great Depression are linked to Britain's inflationary policies, which attracted capital inflows to the US, creating further economic instability. The shift from a gold standard to fiat currency was not a result of a thoughtful consensus but rather an attempt by Keynesians to rationalize pre-existing decisions made under the pretense of temporary suspension during wartime. This transition was not presented to the public as beneficial, and the ongoing emphasis on the importance of the gold standard was used to mask the disarray and unfounded rationale behind moving to fiat currency.