Deirdre N. McCloskey reviews “Money and Government” by Robert Skidelsky.

See ‘Money and Government’ Review: Please Don’t Call It Socialism. Excerpts:

"The solution to such crises, says Mr. Skidelsky, is heavier regulation, right into full socialism. He quotes Keynes, who looked forward to “the State, which is in a position to calculate the marginal efficiency of capital-goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organizing investment.” It is not surprising, then, to find Keynes’s biographer approving of the economist Mariana Mazzucato’s bizarre case for an “entrepreneurial state.” Mr. Skidelsky notes the witticism about the choosing of losers, but retorts that “the question, of course, is not whether government always succeeds, but whether government failure is likely to be greater or lesser than the market failures it seeks to correct.”

Yes again. It is indeed the essential question. But Mr. Skidelsky claims on the basis of thin evidence all manner of terrible imperfections in the way a free economy works, while offering no quantitative evidence that governments are wise enough to fix the imperfection without adding worse ones. In a reversion to the faith of the 1950s, Mr. Skidelsky recommends “using the budget to revive growth.” This is the usual Keynesian magic, spending to get income, miraculously. Though Keynes was famously not concerned about the long run, prosperity in the long run is achieved by commercially tested betterment, not by shovel-ready projects of bridges to nowhere.

Mr. Skidelsky looks forward to “a permanent role for public investment to keep the economy at full employment,” and finds that government needs to provide transport, utilities, hospitals, schools, housing, “and elements of the moral, legal, and religious order.” State religion? Clothing police? Mr. Skidelsky would probably, like Mr. Krugman, wax angry if his vision is described as “socialist.” Still, angry, no; ashamed, yes. The proposal is indeed socialism all the way down."